Protocol a ‘game changer’ for some Northern manufacturers but hitting smaller consumer-facing companies


Irwin Armstrong, former leader of Boris Johnson’s Conservative Party in Northern Ireland, has a simple message for the British Prime Minister when it comes to the province’s unique post-Brexit trade rules: don’t spoil a good thing.

he founder of rapid test diagnostics maker CIGA Healthcare in Ballymena, who campaigned for Britain’s exit from the EU six years ago, has called the Northern Ireland Protocol a game changer for manufacturing companies like his.

Under the protocol, Northern Ireland effectively remained in the EU’s single market for goods when the rest of the UK left last year.

Since then, CIGA has won orders from British exporters busy with paperwork, expanded into new EU markets and doubled sales to the Republic.

“My message to Boris Johnson on the record is ‘sort through what needs to be done and leave the rest alone,'” Armstrong said, calling the deals “a win-win-win.”

However, the protocol is far from universally popular.

The perception that the Protocol undermines Northern Ireland’s place in the UK by establishing an effective border in the Irish Sea has sparked anger from many pro-British trade unionists – which Britain says also undermines the 1998 peace accord.

Mr Johnson has pledged to scrap large parts of the protocol within months if he can’t persuade the EU to scrap controls on goods entering Northern Ireland from the rest of the UK.

Northern Irish business groups have urged London not to act unilaterally, fearing a trade war with the EU would wipe out the newfound competitive advantages enjoyed by companies like Mr Armstrong’s. Instead, they want both sides to agree to relax controls affecting other more consumer-facing businesses.

Before the protocol, Lynas Foodservice, a major grocer in Northern Ireland, took seven days to order a product like mozzarella cheese from its usual UK supplier. Now it can take up to 14 days and require eight different documents.

Longer lead times mean the Coleraine-based wholesaler has to hold more working capital – £11m (€12.75m) up from £10m (€11.6m) previously. With UK suppliers also ending up charging more per pallet for the hassle, the cost is passed on to retailers.

Lynas has stopped trading with 13 of its 200 UK suppliers and is sourcing more goods from the south and shipping others via Dublin to avoid some of the bureaucratic trade hurdles.

“I can add that cost to a company with 650 employees and work with our customers, but I think it’s definitely been more difficult for a lot of smaller companies,” said Managing Director Andrew Lynas.

Recent data showing that Northern Ireland is the only region in the UK, alongside London, where economic growth has exceeded pre-pandemic levels has led to some suggestions for a protocol-driven economic rebound.

Ulster Bank chief economist for Northern Ireland Richard Ramsey said it was not that easy as the economy entered the Covid-19 pandemic in a weaker state than the rest of the UK and with one in four people disproportionately hard hit Record government spending has benefited government employees.

“The protocol is presented as almost binary, it’s either extremely good or it’s terrible and needs to be scrapped,” Ramsey said.

“The reality is there are good parts and a lot of gray areas that still need to be ironed out.”

For the time being, this has created a two-speed economy, he said, with sectors such as food manufacturing and pharmaceuticals booming at a time when economic surveys for May suggest the cost of living crisis is hitting Northern Ireland harder than most regions of the UK.

In the small town of Maghera, Michael McGrath, owner of Crushing Screening Parts (CSP), said the protocol’s “good parts” are directly responsible for a 32 percent annual jump in sales. He plans to increase his workforce of eight.

Mr McGrath said he could get a part to Poland and Germany by next morning, while it could take at least two to three days from a competing UK supplier. As a result, the share of CSP sales going to the EU has more than tripled to 33 percent.

For Mr. McGrath, the answer to the riddle of protocol lies in the famous words of Bill Clinton 30 years ago: It’s the economy, fool.

“It’s all about the economy,” he said. “The economy can do really well if the protocol is implemented correctly and at a level that we can all live with.” Protocol a ‘game changer’ for some Northern manufacturers but hitting smaller consumer-facing companies

Fry Electronics Team

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