Cork manufacturer Peter Merrigan is seeking to expand his network of suppliers within the EU in the face of fears that a new Brexit duty may be imposed on products he currently imports from the UK and Northern Ireland.
Meanwhile, his supplier in Northern Ireland has shelved plans for expansion into the Republic because of fears a hard Brexit would spark a recession here.
“We manufacture pressure washers for retail and wholesale,” said Mr Merrigan, who employs 14 people at Triace Ltd in Fermoy, in business since 1981.
“Currently, a lot of our components come direct from within the EU such as Italy, but a certain amount also comes from the UK and the North of Ireland,” he said.
“We have a number of concerns around Brexit and one is the fact that nobody can tell us what exactly will happen on March 29th. Will we have to pay a duty on the products we import from the UK and the North?”
He said on a consignment from Italy for example, he pays neither VAT nor duty.
Both VAT and duty have to be paid up-front, and duty is not reclaimable. And, although the VAT is reclaimable, it could take his company up to a year to get a refund, Mr Merriman said.
“At the moment we’re trying to find ways to source more of our components from within the EU rather than the UK or the North.
“Obviously this will displace trade with companies in the North and the UK but if 3 per cent or 5 per cent duty is placed on components coming from the North of Ireland, we’d have to pass that on to our customers.”
Price increases
Mr Merrigan said he feared that for some of the company’s larger pieces of equipment, a duty, for example at five per cent, could hike up the price of some of products “by anything between €150 and €500, and it will be impossible to export back into the UK and Northern Ireland”.
He says he has already received correspondence from Revenue warning that when Brexit happened he would have to comply with certain customs requirements.
Meanwhile one of Triace Ltd's suppliers, CBD Powerwashers Ltd, based in Cookstown Co Tyrone, has also taken steps to buffer the company against any negative impact from Brexit.
The firm, which employs 15 people in the manufacture of pressure washers and generators, conducts about 70 per cent of its business with clients in the Republic.
"From our point of view planning is very difficult," managing director Paddy Quinn said.
“One issue we have to consider is whether there would be duty on products manufactured by us in Northern Ireland and sold to clients in the southern Ireland.
“This could potentially put us at a competitive disadvantage and we felt the only thing to do is to take the risk of opening a company in southern Ireland.
“However, we have postponed plans to do that because of the fear that there might be a recession.”
However, he said, the company has registered a shelf company in Ireland which would leave an option open to CBD Powerwashers if there were issues bringing in goods such as pumps or engines from Europe.
“At least we could import them into southern Ireland and we’ll worry about getting them to the North after that.
“There are so many mixed messages about what will happen, that it is only a guess. It’s very hard to invest financing into things that might not be needed.”
