Lidl warns suppliers will cover rising costs of a no-deal Brexit

A sign for Lidl. Photograph: Rui Vieira/PA. - Credit: PA Wire/PA Images

Lidl has warned suppliers that it expects those with existing contracts to pay any additional EU tarrifs as a result of a no-deal Brexit.

Lidl Ireland said that all its existing contracts contain a delivered duty paid (DDP) clause which means the seller bears the costs importing the goods including any tariffs.

Currently there are no tariffs between the UK and Ireland because both are members of the EU, but the NFU fears that leaving without a deal could leave British suppliers facing additional costs to export agricultural products to EU countries.

Lidl Ireland said it had held a number of workshops with its suppliers to “ensure they have all necessary information, certification and documentation to avoid any disruption to their respective supply chains”.

The supermarket added: “We have been working closely for over two years with external consultants, not only to get our business Brexit ready, but also to ensure our valued suppliers are as prepared as possible.

“All existing Lidl contracts contain a DDP clause.

“In an effort to understand the level of preparedness of key UK suppliers we are communicating proactively with them and working together to resolve any potential barriers to supply.”

The National Farmers Union (NFU) has warned that a no-deal Brexit and the tarrifs it would bring would “massively reduce” competitiveness.

NFU director of EU exit and international trade Nick von Westenholz said the organisation wanted a deal with the EU that maintained “free and frictionless trade”.

He added: “It is clear that in a no-deal Brexit UK companies will face high tariffs on agricultural exports to the EU.

“If this additional cost is passed on to British farmers, many of whom already operate on very tight margins, it could massively reduce the competitiveness of British goods on the EU market and potentially lead to a surplus in the UK market.

“This would be exacerbated further by the low, and in some cases non-existent, tariffs the government has said it will charge on imports in a no-deal scenario.

“The NFU has consistently called for a deal with the EU that maintains free and frictionless trade and provides the right trading, regulatory and economic environment in which farming can thrive.

“We strongly advocate leaving the EU in an orderly manner in order to achieve a positive outcome for British farming.”