No deal Brexit: Will the price of food go up after Brexit?

We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

Hopes are growing for each side to reach a suitable conclusion, but talks have been hampered by a positive coronavirus test within the EU camp. While many are interested in the particular sticking points of negotiations and the politics of the Brexit show, most normal British people are interested in the particular effect it’s going to have on them – and particularly on their finances.

The price of food has been a consistent worry for some people, with a sudden change onto WTO terms imposing tariffs on goods which could push prices up on the consumer’s end.

The UK imports around half of its food each year according to the British Retail Consortium, and around a third of all food consumed in the UK comes from EU member states.

While this doesn’t necessarily equate to food shortages, as the UK exits the single market, it will push the price of imported foods way up.

As per the schedule of tariffs published in May, roughly 85 percent of EU food imports will be hit with tariffs.

The BRC estimates that the average tariff would be higher than 20 percent, which could jump to over 40 percent for beef and cheese.

It will also come at a difficult time for the UK generally – not only is the UK in its second coronavirus wave, but imports are used much more regularly in the winter, with 90 percent of our lettuce, 80 percent of tomatoes and 70 percent of soft fruit are imported, the vast majority coming from the EU.

Coronavirus has only exacerbated the focus on UK supply chains as the nations move toward self-reliance as a matter of need.

Shoppers are also beginning to shift priority and look more locally for food – an area where prices are less likely to rise in the case of a no-deal Brexit.

Last year, the Department for Food and Agriculture said it could not guarantee that food prices would stay the same.

So will the price of your favourite foods go up if the case of a no-deal Brexit?

Andy Needham, managing director of Approved Food, explains what items could be hit with a price surge if there is a no-deal Brexit.

Mr Needham said: “The UK’s food and drink supply chain is efficient and well-managed and manufacturers have robust procedures in place. However, we are worried about what will happen to the price of imported staples – Italian tinned tomatoes, for instance – that may be affected by tariffs in the event of a no-deal Brexit.

DON’T MISS
How much will no-deal Brexit cost the UK? The staggering estimate [ANALYSIS]
Brexit food shortages: What to stockpile as no-deal Brexit looms [EXPLAINER]
Travel after Brexit: Can Britons travel to Europe as usual post-Brexit [INSIGHT]

“Food and drink is the key area that will be affected by Brexit. Not too many people are bothered about share trading – that’s a different world to them – but when they suddenly have to pay £2 for a tin of tomatoes, then that will resonate.

“To make matters worse, the tomato harvest was hit last year by the weather and that always puts a strain on prices.

“Other goods that could be hit by tariffs are items like olive oil, tinned peaches and dried pasta – commodities where there is little or no UK production.

“The impact of tariffs could be very significant for individual businesses, the wider food industry and the consumer because costs cannot be fully absorbed by businesses so some will be passed on to the consumer.

“I’m sure people didn’t vote in favour of Brexit with an expectation that the price of basic food and drink would skyrocket but that is looking as though it will be the result unless a deal can be done.

“Another area of concern is the additional paperwork that will be generated and the requirement to use third parties to ensure goods are cleared at ports and so on – this will add yet more onto the cost of processing a pallet of goods.

“Both importers and trade associations have written to the government urging ministers to seek alternative solutions but so far, no response has been forthcoming and it is getting to the stage now where all those involved need clarity.

“As a business, we are working with our suppliers and preparing as best we can but unless a deal is made, it’s difficult to see how the public – and particularly those on low incomes – will be unaffected.”

Source: Read Full Article