Food prices to spike under ‘no deal’ Brexit, BRC warns

The British Retail Consortium has warned that the average cost of produce brought into the UK from members of the European Union would increase 22%.

And shelf prices of some everyday food items, such as cheese and beef, could rocket by around a third.

More than three-quarters of the food currently imported by British retailers comes from the EU, but if the UK leaves the union without a trade agreement, imports would be subject to World Trade Organisation rates.

Under those circumstances, the average tariff on all food imported from the EU would be 22%.

But tariffs on some goods such as cheese and beef would be as much as 44% and 40% respectively.

The BRC acknowledged that there wasn’t a direct relationship between the tariff and shelf prices, but said it was “clear that new tariffs will only put upward pressure on prices”.

It added that the impact would be “considerable” if UK producers reacted to higher import costs and pushed their prices up as well in order to align themselves with foreign product costs.

Price increases

According to BRC estimates, the price of cheddar cheese would surge as much as 32%, beef would rise up to 29% and tomatoes could be 18% more expensive for shoppers.

The BRC’s director of food policy Andrew Opie warned such price increases would represent “a huge burden to hard-pressed shoppers” who are already finding their finances squeezed by the impact of inflation.

Opie said: “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.”