Brexit has for years been a problem for elite politicians, officials and business leaders. 

Now that the final agreement has had time to bed in, the reality of it is filtering down to ordinary consumers and workers. 

Iceland is a grocery chain employing 344 workers. As Francesca reported, this week it entered examinership, citing Brexit-related regulatory problems. 

The company has told the court more than half of its stores may need to close if it is to survive in Ireland. Ten of the 26 are currently trading profitably. 

To be sure, Iceland’s problems don’t start and end with Brexit. It cited a high-cost base, including high rents. And a strike at one of its branches won’t have helped. 

But at the very least, Iceland’s problems with the Food Safety Authority of Ireland were the straw that broke the camel’s back. The company applied for examinership days after the FSAI issued a recall of 239 frozen animal products. Francesca said:

“On June 15, 2023, the FSAI served a notice on Metron for the immediate withdrawal from its retail stores of all imported frozen food of animal origin that had been imported into Ireland since March 3, 2023, citing traceability concerns. Products pulled contained meat, fish, eggs, and dairy products. An investigation is ongoing.”

It’s no surprise that the grocery industry is the one under stress from Brexit. The grocery business is highly competitive. The margins are fine and the supply chains are taut. Higher costs, shortages or delays are more than an inconvenience for grocers. They can blow up their business model. 

Iceland’s business model is a bit like that of Lidl or Aldi. Iceland prices its products more cheaply than many of its rivals, so its margins are smaller. 

Iceland compensates itself by offering a smaller selection. Where a big brand supermarket will stock up to 90,000 items in each store, Iceland will only stock the 3,000 quickest-selling ones. So even though Iceland makes less profit on each sale, the idea is that it sells more stuff. This drives up returns on capital, which are ultimately the name of the game.

The point is that Iceland is not the type of business that can remove 239 items from its shelves and carry on as normal. Where 239 items would amount to 0.3 per cent of a big supermarket’s inventory, it’s about 8 per cent of Iceland’s.

The other businesses most exposed to Brexit are at the opposite end of the scale — small businesses that don’t enjoy big economies of scale, for whom a change in costs can wipe out their profits. Last year Ruth O’Connor met with the owners of craft businesses who’ve been impacted by Brexit. Anne Behan of McConnell woollen mills said: “The increase in carriage is just crazy. A box that used to cost me €5 to send is now €15. A box that cost €9 to send to the UK is now costing me anything between €35 and €55.”

Meanwhile this week Sean wrote about what could be the end of the line for the Barryroe oil and gas field. Barryroe Offshore Energy says it is preparing to enter into voluntary liquidation. 

The company’s decision hinged on Minister Eamon Ryan’s decision not to grant Barryroe a licence to explore the site. The government’s judgment seems to be that Ireland’s energy needs can safely be met by our existing and planned interconnectors, in addition to our domestic supply. Let’s hope they’re right.

As the Iceland story demonstrates, when trade relations between countries shift unexpectedly, ordinary workers and consumers are the ones to suffer.

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Elsewhere last week, Tom reported that Gerry Lennon is leaving his management role at Mediahuis after more than 40 years in the newspaper business. The quintessential ad man, who once combed Dublin’s Capel Street looking for furniture shop business, became one of the most successful figures in Irish media.

HLB Ireland has just folded boutique accountancy firm John McCarrick & Associates into its practice, the fifth transaction it has completed. HLB’s managing partner Mark Butler gives the rationale for the deal, and outlines his firm’s expansion plan.

In a vote of confidence for the brand’s potential in the UK, the Azzurri Group has taken a controlling stake in the Mexican chain Boojum. Rosanna revealed how the deal came about. 

With offices shut and nursing homes locked down, Blackbee directed clients into the credit of offices and nursing homes. An update to clients shows how the investments are performing. Sean had the story.

The Currency also reported extensively on what is going on in RTÉ. I would like to thank my deputy editor Thomas Hubert and the team for their reporting. As a non-executive director of RTÉ, I was not involved in the editing process nor did I see any story prior to publication. Their coverage is here.