Amazon is elevating eyebrows in Eire with reviews of a e-commerce hub

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An Amazon.com delivery driver puts boxes in a van outside a distribution facility in Hawthorne, Calif., On February 2, 2021.

Patrick T. Fallon | AFP | Getty Images

DUBLIN – Amazon has been firmly anchored in Ireland for years, but seems poised to expand its presence even further.

The e-commerce giant is reportedly opening its first full-fledged fulfillment center in Dublin to serve the Irish market.

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

Amazon has not yet confirmed the opening of the fulfillment center: “We do not comment on rumors and speculations,” it told CNBC. However, the reports and the company’s steadily growing presence raised eyebrows at what this will mean for workers in the country.

In March, the UK and Irish union Unite the Union launched a hotline for Amazon workers in the UK and Ireland to report problems in warehouses.

This is happening against the backdrop of union efforts in the US, most recently with a hotly contested vote in Alabama that Amazon won.

“Unite’s concerns are importing poor working conditions. Large employers in every sector have the opportunity to improve or decrease working conditions in that particular sector,” a Unite spokesman in Ireland told CNBC.

In response to the hotline, an Amazon spokesman said it respected the rights of its employees to join a union.

“The fact is, we already offer great wages, great benefits and great opportunities for professional growth while working in a safe, modern work environment. The unions know this,” the spokesman said.

Retail challenges

Amazon’s expansion comes at a time of drastic changes in Irish retailing. Both stores and independent retailers have closed their shutters for most of the past year during the various coronavirus lockdowns.

Edgar Morgenroth, a professor of economics at Dublin City University, told CNBC that Amazon’s e-commerce business is expected to expand in Ireland.

“The Irish market may be small, but it’s not a bad place, so money can be made here. You would have expected this move anyway,” said Morgenroth.

“The concern is that by doing so, they will both be able to better serve the market and expand the range of services. At this point, it will do even more damage to local retailers.”

Lockdowns have forced many retailers to sell online and rely on delivery or click-and-collect services when restrictions allow.

Jade O’Connor is Vice President of Product and Marketing at GetLocal.ie, an online independent retailer platform that was recently launched to help small businesses deal with this situation.

“Shop local has absolutely been the talk of the town for the past 12 months and it just makes sense because local businesses are the lifeblood of our towns, villages and towns,” said O’Connor.

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

Morgenroth said the urge for more local shopping is admirable, but it’s a steep spike as store visitor numbers drop. The gap between online and stationary is only widening. The retail volume in Ireland in January 2021 was down 21.8% compared to the previous month and online sales were up 10.9%.

“That is the problem that you are increasingly seeing, certainly in the smaller cities. The step is not enough to support them at all, and Covid makes this even worse,” Morgenroth said.

In the midst of the Covid-19 pandemic, many small retailers are still incurring costs operating their premises without people coming through the door.

“Amazon didn’t have to do that. They actually made money. They got richer while the local businesses got poorer. That means they are much less able to fight Amazon’s competition.”

Data center

Warehouses will be a far cry from the only buildings in Ireland to be named Amazon.

The technology giant’s data center and cloud business has been operating in Ireland for years and is working with several major technology companies to build sprawling data centers in Dublin and neighboring counties.

In 2020, Amazon announced that it would hire an additional 1,000 employees in Dublin and Cork, primarily for the Amazon Web Services business in the areas of support, security and engineering. This means that around 5,000 people are employed in Ireland.

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

All of these steps – whether data centers or warehouses – mean that Amazon’s presence in the Irish market is deepening.

Morgenroth said that Amazon’s ever-expanding spread around the world may seem unstoppable, but its vast reach continues to attract the attention of regulators on both sides of the Atlantic.

“Before long, I would have thought from a competitive standpoint that Amazon would have to be considered,” he said.

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