Impact of Brexit on consumers in Ireland assessed in new research commissioned by the CCPC
March 21, 2018
Research undertaken by the ESRI and commissioned by the Competition and Consumer Protection Commission (CCPC) has assessed the potential impact of Brexit on Irish households. Using a database of over 4,500 products imported from the UK, the research examined the potential impact of two Brexit scenarios on household budgets.
Speaking today Isolde Goggin, Chairperson of the CCPC said, “Given the high degree of integration between the Irish and UK retail/grocery sectors, there is no doubt that the UK leaving the EU will have an impact on Irish consumers. There is still a huge degree of uncertainty; however, the better our understanding of the potential impact, the better Ireland will be in a position to prepare. With this in mind, the CCPC has worked with the ESRI to help identify what the impact could be from a consumer perspective. The intention is that the results of this study will help inform a wider understanding of the potential impact of Brexit and assist in ensuring Ireland’s preparations are as comprehensive as possible.”
The ESRI’s research examined two Brexit scenarios. The first, where there is a trade deal and tariffs are avoided, but where there still could be significant non-tariff barriers such as costs arising from additional time spent at customs, or due to changes in labelling rules and other regulatory standards. The second, a ‘harder’ scenario with the imposition of World Trade Organisation tariffs in addition to non-tariff barriers.
Depending on the scenario, the analysis finds an increase in the cost of living of between €892 and €1,360 per year for the average household. The increases would be unevenly distributed across households, with lower income households most affected by price rises. The actual impact, however, will depend not only on the eventual deal reached, but on the level of domestic competition, the availability of alternatives to particular products and consumers’ responses to changes in prices.
Commenting on the results, Isolde Goggin said, “Although the true impact of Brexit will be unknown for some time, this research makes the potential impact on households more tangible. The findings further inform our understanding and will help Ireland to develop the appropriate responses. The implications of the research highlight an important opportunity for domestic businesses, particularly the food industry, in the form of import substitution. In order to take this opportunity, Irish businesses need to take action now. The cost of living increases could be significantly mitigated if Irish businesses seize this opportunity along with other responses that may be taken at a domestic level. The CCPC believes that this will inform part of the work of the wider Government system in their assessment and preparation in advance of Brexit.”
The Brexit research paper can be found on the ESRI website.
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