Import bills could rocket
Food bills face 22% rise without Brexit deal
David Lonsdale: Stark findings (photo by Terry Murden)
Food bills could rocket by a fifth unless there is an agreement on trade with the EU, according to retail analysts.
Over three-quarters of the food imported by the UK comes from the EU and without a deal most of these goods will be subject to new tariffs.
As a result, the average cost of food imported by retailers from the EU would increase by 22% according to the British and Scottish Retail Consortium.
Further analysis, based on the proportion of European food retailers sell and the impact of new tariffs, demonstrates how much typical products could be affected. The impact will be considerable if UK producers react to higher import prices and push up their prices to align with foreign products.
For consumers, new tariffs will mean higher prices. The SRC/BRC has estimated potential price increases for a number of everyday food items, should goods from the EU face WTO tariffs. The price of cheese for instance could rise by more than 30%, or for tomatoes nearly 20%.
Andrew Opie, director of food policy at the British Retail Consortium, said: “Price increases of this scale to everyday food items will add a huge burden to hard-pressed consumers whose finances are already under increasing strain from inflationary pressures.
“Even at the lower end of the risk, price rises of five to nine per cent dwarf the increase from inflation that shoppers are currently paying on food goods.
“And the tariffs are particularly high on meat and dairy products, meaning that products such as beef and cheese would be hardest hit.
“With consumers’ buying habits being dictated ever more by a shrinking pool of discretionary spend, there’s no doubt that they will find an additional hit of this magnitude to their weekly food bills extremely hard to swallow.
“There will be opportunities from new trade deals in the medium to long term, but there’s a pressing need to avoid a cliff-edge situation on Brexit day. This is why the priority for the UK Government has to be securing the continuity of free trade with Europe from March 2019 and thereby delivering a fair Brexit for consumers.”
David Lonsdale, director of the Scottish Retail Consortium, added: “These are stark findings and show that Scottish households potentially face a leap in prices for everyday essentials like meat, cheese and vegetables if the UK doesn’t secure a lasting tariff-free trade deal with the EU after Brexit.
“Retailers are straining to keep down prices but unwanted new import tariffs would be difficult to absorb and may mean higher prices on shop shelves in Scotland.
“This presents a challenge too for Scottish consumers who are already seeing family finances stretched due to a cocktail of rising inflation, higher council tax and pension contributions, and with talk of looming income tax rises.”