Businesses have been stockpiling non-perishable products from the United Kingdom as the prospect of a no-deal Brexit becomes increasingly likely.
Medicinal products, medical equipment, food with a long shelf-life and clothing are among the goods which Maltese businesses have stocked up well in advance of today’s deadline for a trade agreement between the UK and the European Union.
UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen met earlier this week and gave themselves until Sunday to reach an agreement. Without such a deal, the EU will impose tariffs on goods coming from the UK, and Britain will do the same on imports from the EU.
Andre Fenech, the head of policy development and member relations at the Malta Chamber of Commerce, Enterprise and Industry, said that from feedback received, members are quite well-prepared for the eventuality of a no-deal Brexit.
Most of them did their homework well in advance and others stockpiled on products because there was still hope that some form of agreement can be reached in the first quarter of 2021. He said businesses still trying to recover losses incurred during the onslaught of the COVID-19 pandemic are now faced with the prospect of a no-deal Brexit.
“In the last few months, when we started seeing that the possibility of a no-deal Brexit was becoming more of a reality, we started pushing our members to start making alternative arrangements, contact their British suppliers or try source the products from other markets. From the feedback we are receiving, it seems our members were quite successful in achieving this,” he said when contacted.
With regard to price increases, Fenech said the administrative burden on the importer is expected to grow and certain products will now be taxed, which means prices are bound to increase.
Some products can be levied between five and even 40%, especially food items. Parliamentary Secretary for EU Funds Stefan Zrinzo Azzopardi said the government had been proactive to ensure a high level of preparedness to mitigate the impact of the UK’s exit from the EU by implementing a series of initiatives since 2019.
As a result of impact assessments, several adaption measures had to be carried out across government, not least in key departments and authorities. Customs, for example, engaged more employees to cater for the additional workload and has also been providing economic operators with the necessary training on the national import and export system.
And Identity Malta is currently undertaking an extensive exercise to register UK citizens residing in Malta who are beneficiaries of the ‘withdrawal agreement’ between the EU and UK earlier this year so they may continue to benefit from their right to reside in Malta, notwithstanding Brexit.
The health ministry and the Medicines Authority are actively ensuring the continuity of supply of medicines given that circa 80 per cent of medicines are imported from the UK, he said.
“We are closely monitoring all developments in the negotiations taking place at the EU level, particularly in relation to the issue of connectivity between Malta and the UK, and the measures that will need to be adopted if a deal by the end of the year remains unattainable,” he said.