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Amazon is raising eyebrows in Ireland with reports of a new e-commerce center

DUBLIN – Amazon has been well established in Ireland for years, but it looks set to expand its presence even further.

The e-commerce giant is opening its first fully developed distribution center in Dublin to serve the Irish market.

Ireland has been served by the UK for years, but this allows Amazon to avoid Brexit-related headaches from shipping goods across the Irish Sea. The company also held talks with operators at Shannon airport in the west of the country about opening a distribution center there.

Amazon has not yet confirmed the opening of the distribution center: “We do not comment on rumors and speculation,” he told CNBC. But the company’s reports and growing presence have raised eyebrows about what this will mean for workers in the country.

In March, the British and Irish union called Unite the Union launched a hotline for Amazon workers in the UK and Ireland to report any problems they were having with deposits.

It comes amid a scenario of unionization efforts in the US, most recently with a highly disputed vote in Alabama, which Amazon won.

“Unite’s concern would be the importation of poor working conditions. Large employers in any sector have the ability to increase or decrease working conditions in that specific sector, ”a spokesman for Unite in Ireland told CNBC.

In response to the hotline, a spokesman for Amazon said it respects its employees’ rights to join a union.

“The fact is that we already offer excellent salaries, excellent benefits and excellent opportunities for career growth, all in a safe and modern work environment. The unions know this, ”said the spokesman.

Retail challenges

Amazon’s expansion comes at a time of drastic changes in Irish retail. Both stores and independent retailers kept their locks closed for most of last year during the various coronavirus blocks.

Edgar Morgenroth, professor of economics at Dublin City University, told CNBC that Amazon was expanding its e-commerce business in Ireland.

“The Irish market may be small, but it is not a bad place, so there is money to be made here. You would expect this move anyway, ”said Morgenroth.

“The concern is that with this they can better serve the market and also expand the range of services they can provide. At that point, it will inflict even more damage on local retail companies. “

The blockages have forced many retailers to start selling online, relying on delivery or click and collect services, when restrictions allow.

Jade O’Connor is vice president of product and marketing for GetLocal.ie, a platform for independent retailers to sell online, recently launched to help small businesses in this situation.

“Buying locally is absolutely the talking point of the past 12 months and makes sense because local businesses are the lifeblood of our cities, towns and cities,” said O’Connor.

“For some companies, Amazon is a very reliable and very useful source of revenue, and for others, frankly, it doesn’t work.”

Morgenroth said the drive for more local shopping is admirable, but it is a steep climb when steps are slowing in physical stores. The gap between online and traditional is only widening. The volume of retail sales in Ireland fell by 21.8% in January 2021, compared to the previous month, and online sales increased by 10.9%.

“This is the problem that you are seeing more and more, certainly in smaller cities, the movement is not enough to sustain them and Covid makes it even worse,” said Morgenroth.

In the midst of the Covid-19 pandemic, many small retailers are still accumulating costs with running their facilities, but without people coming through the door.

“This is something that Amazon did not need to do. They really made money. They got richer, while local stores got poorer. This means that they are much less able to fight competition from Amazon. “

Data centers

The warehouses will be far from the only buildings in Ireland bearing the Amazon name.

The technology giant’s data center and cloud business has been operating in Ireland for years, joining several large technology companies in building large data centers in Dublin and neighboring counties.

In 2020, Amazon announced that it would hire 1,000 more people in Dublin and Cork, primarily for its Amazon Web Services business, in support, security and engineering roles. This brings the workforce in Ireland to about 5,000.

Recently, according to a report by The Currency, Amazon acquired a new piece of land in Dublin for another data center facility.

All of these changes – be they data centers or warehouses – mean that Amazon’s footprint in the Irish market is getting deeper and deeper.

Morgenroth said that the ever expanding expansion of the Amazon globally may seem inexorable, but its vast reach continues to draw the attention of regulators on both sides of the Atlantic.

“Soon, I would have thought, from a competition point of view, that Amazon would need to be analyzed,” he said.

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