New analysis by the BRC spells out the potential cost to shoppers of leaving the EU without a tariff-free trade deal.
Over three quarters of the food that the UK imports comes from the EU and without reaching an agreement on trade, 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%.
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 their prices up to align with foreign products.
For consumers, new tariffs will mean higher prices. The 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.”
(source: BRC)
