Northern Ireland Protocol “breakthrough” promises to alleviate pressure on F&B industry

28 Feb 2023 --- UK Prime Minister Rishi Sunak has achieved what he says is a “real breakthrough” by agreeing on fundamental revisions to the Northern Ireland (NI) Protocol – now named the Windsor Framework – with European Commission President Ursula von der Leyon.

Over 1,700 EU laws have been removed and a new “green lane” will exempt agri-food businesses from bureaucratic border checks at the Irish Sea – something leaders hope will bolster trade in the region.

Full details of the agreement have yet to be revealed, but the green lane seeks to ensure food retailers like supermarkets and hospitality businesses will have significantly reduced checks and costs when moving goods from Great Britain to NI.

Chilled meats like sausages, banned under the old Protocol, can now move freely into NI. Tax rules will also be altered so that zero rates of VAT on energy-saving materials like solar panels and alcohol duty reforms will now apply.

A single supermarket truck who previously had to provide 500 certificates can now instead make a straightforward commitment that goods will stay in NI.Michael Bell, executive director of the Northern Ireland Food and Drink Association (NIFDA), says that “it will take time to fully analyze the document and understand implications for our members, but on first reading, the Windsor Framework looks substantial and balanced and represents the kind of pragmatic, practical solutions that we have been urging.”

“We are working through the details of the deal, but the agreement itself is an important step forward by both the UK Government and EU.”

Power sharing
The Windsor Framework is intended in part to ease political tensions in NI stoked by Brexit. Stormont (NI’s political assembly) has been boycotted by the Democratic Unionist Party (DUP) since May 2021 to pressure reforms that would remove NI from the EU’s Single Market entirely.

Sunak’s deal includes a “Stormont Brake” mechanism, which will give parties in NI the power to veto EU goods laws. Whether this mechanism will be enough to appease the DUP, which is the most powerful unionist party in NI, remains to be seen.

Hardliner DUP member Ian Paisley Jr. says the deal “doesn’t cut the mustard,” but party leader Jeffrey Donaldson asserts more time is needed to study the agreement and gain clarity on what the rules, including the Stormont Brake, will mean for the £65 billion (US$78 billion) worth of NI produced goods traded within the UK each year.

The revisions come in the run-up to the 25th anniversary of the Good Friday Agreement, in which unionist and nationalist communities agreed to share power and end decades of violence in the region.

The Windsor Agreement lessens the EU’s role in trading arrangements but the European Court of Justice maintains a role. Polls show that most DUP members would refuse to rejoin Stormont unless the NI Protocol was removed or substantially altered.

Consumer choice, international investment
The UK government asserts the deal will ensure “choice for consumers on supermarket shelves.”

“A single supermarket truck who previously had to provide 500 certificates can now instead make a straightforward commitment that goods will stay in NI. Retailers will mark goods as ‘not for EU,’ with a phased rollout of this requirement to give them time to adjust,” reads a government statement.

Dominic Goudie, head of international trade at the UK’s Food and Drink Federation, says that any deal to improve the movement of goods is welcome after the “significant uncertainty” F&B manufacturers have faced over the past two years.

Some major business players have spoken positively on news of the agreement, saying that NI is in a unique position to take advantage of access to both the EU Single Market and the UK.

Mark O’Connell, executive chairman of Belfast-based OCO Global, told the Belfast Telegraph the new agreement is a “substantial Protocol Dividend.” He said the region is now one of “the most desirable investment locations in Europe.”

Dublin-based F&B giant Kerry Group, which recorded €7.4 billion (US$8.4 billion) in revenue last year, has not yet commented on the deal or its potential implications.

By Louis Gore-Langton

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