(Bloomberg) -- Marks & Spencer Group Plc’s supply of beloved candies such as Percy Pig sweets to Ireland is under threat, as evidence mounts of the strain Brexit is placing on U.K. retailers.
Deliveries to M&S stores in the European Union are facing red tape and about a third of food products sold in Ireland may be impacted by complex trade rules, Marks & Spencer said Friday. Percy Pigs pose a conundrum because they are made in Germany and the retailer receives the deliveries in the U.K. Sending them on to Ireland without any further processing or alteration may trigger tariffs.
The huge “scope and complexity” of the rules-of-origin regulations means that big businesses, like M&S, will have to “find an expensive workaround” to avoid paying new duties, Marks & Spencer Chief Executive Officer Steve Rowe said on a call with reporters.
Brexit has already become a headache for several U.K. retailers just as the country’s new lockdown weighs on their domestic business. Debenhams temporarily switched off its Irish e-commerce site as uncertainty about trade rules snarled operations. Furniture retailer Made.com halted deliveries to both Northern Ireland and the Republic, saying it’s unclear what additional paperwork is needed.
Marks & Spencer has been selling Percy Pig sweets for almost three decades. The gummy candies, in the form of pink pig heads, are made by a company called Katjes in Germany.
Marks & Spencer’s Irish stores recently have also suffered some food shortages. The company also said Friday that like-for-like sales fell 7.6% over Christmas as weaker clothing revenue outweighed strong demand for food. Marks & Spencer also runs stores in the Czech Republic and has franchises in France.
The retailer said business in the U.K. remains very challenging in the near-term as the lockdown forces retailers to shut cafe and restaurant operations.
The stock rose 1.2% Friday morning in London, shaking off an initial decline. That’s after they lost more than a third of their value in 2020.
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