Tesco chair Allan warns of higher food prices in no-deal Brexit

The supermarket giant’s non-executive chair says if the UK and EU fail to agree a Brexit deal factors such as tariffs “almost inevitably are going to lead to higher prices and I think if we go out on a no-deal basis that is unavoidable”.

Speaking to Bloomberg TV, Allan warned that tariffs on some food products are “quite substantial” and may encourage shoppers to buy more domestically sourced alternatives – such as eating cheddar rather than French cheese, which he said can come with tariffs “as high as 40%-plus”.

Allan forecasted that the price increase of the average shopping basket in the event of a no-deal Brexit would be between 3-5%.

He also said that shoppers should expect temporary shortages on some fresh food items, “particularly short-life fresh foods”, but said this should normalise in a month or two and should not cause shoppers to panic buy.

“I don’t think there is any reason at all for any consumer to panic or panic buy at the moment. There is still going to be plenty of food in the UK – there may just be slightly restricted choice for a period of time.”

To mitigate this anticipated supply disruption in the event of a no-deal Brexit, Allan said Tesco has been pre-emptively stockpiling long-life products in its warehouses as well as diverting shipments to other UK ports besides Dover.

Allan’s words come as Tesco big four rival Asda unveiled plans to close all of its 631 stores on Boxing Day and give all eligible hourly paid staff a 100% bonus “for their unstinting hard work and commitment during 2020”, which will be paid in February 2021.

In a message to colleagues, Asda boss Roger Burnley said: “This has been a challenging year and you have all done an incredible job, continuing to serve our customers and communities while juggling so many other commitments.

“But it’s also been challenging from a personal perspective as we have not been able to spend time with our families and friends, which has been hard for us all. 

“As you know, the strict guidelines set out by the government will change between December 23-27 and more households will be able to gather together. This is of course our busiest time of year but it was important for us to give as many of you as possible the opportunity to spend this time with those loved ones that you may not have not seen for many months so, uniquely for this year, we will not reopen our stores until December 27”