Small shops in Northern Ireland (NI) could be at a “competitive disadvantage” under a three-month grace period giving supermarkets exemption from import tariffs.

Speaking in the House of Commons last week, Michael Gove said supermarkets will be exempt from tariffs on importing goods from Great Britain into NI for three months when the Brexit transition period ends on 1 January.

He said: “If that had been implemented, that would have raised the prospect of a 58% tariff on a pint of milk going from Scotland to a supermarket in Strabane or 96% on a bag of sugar going from Liverpool to the shops of Belfast.

Retailers stockpile as no-deal Brexit looms

“That is why we have a grace period for supermarkets to update their procedures. It protects Northern Ireland supermarket supplies.”

Trade body Retail NI has called for the three-month period to apply to independent wholesalers and retailers who would otherwise be stuck with higher prices. Retail NI chief executive Glyn Roberts said: “At a meeting with the secretary of state for Northern Ireland, I asked him directly if this applied to our members and he did not answer my question.

Plan for no-deal Brexit now, urges ACS

“It is absolutely unacceptable that the UK government could make a major statement and not have this information available, which could potentially result in a third of our local independent food and grocery sector being at a competitive disadvantage to large supermarkets.”

Spar, Costcutter and Henderson also demanded answers.

A Costcutter spokesperson said: “It is crucial independent retailers and wholesalers are included. We are therefore working with our trade body partners to ensure this point is heard at the highest levels of government.”

Elsewhere, a report by the University of Bath’s School of Management said a no-deal Brexit would give Northern Ireland the cheapest legitimate cigarettes in the UK. Author Dr Rob Branston explained: “[Northern Ireland] will be considered part of the EU customs union, following EU rules and where imports to and from the EU will be tariff-free.”

Coronavirus and Brexit delay shop chiller repairs

Branston said the move could take £1.77 off the price of a 30g pack of rolling tobacco, raising the prospect of the lines, illegal for sale in the rest of the UK, crossing the Irish sea.

However, NFRN member Eugene Diamond said it could dampen the illicit trade near his Diamond’s News store in Ballymena. “Anything that makes legitimate pricing in Northern Ireland more competitive with the illicit trade is a positive move. It’s one of the biggest challenges we face,” he said.

Read more Brexit news for retailers