Shoppers face £3.1bn tariff bill for food in a no-deal Brexit, retailers warn
High tariffs on food and drink in the event of a no-deal Brexit will leave shoppers facing a £3.1bn bill, the British Retail Consortium (BRC) has warned.
The group, which represents over 5,000 businesses that generate £180bn of retail sales, said if the UK and EU were unable to reach a deal before Christmas, supermarkets operating on tight margins would have no choice but to pass on the additional tariff costs.
Increased physical checks, paperwork and other non-tariff barriers are expected to push up retailers’ expenses still further.
The UK currently sources four-fifths of its food from the EU, but after intense lobbying from the farming industry, Ministers agreed to impose tariffs on imports such as meat, poultry, cheese and butter from across the world, bringing the average tariff on food imported from the bloc to over 20 per cent in a no-deal scenario.
Farm groups had feared UK producers would face extremely high EU tariffs for their exports while receiving no protection from imports.
Andrew Opie, director of food and sustainability at the BRC, said: “There is no time to waste. The UK and EU must hammer out a final arrangement as soon as possible.
“Coronavirus is already making life hard for consumers, particularly those on lower incomes, and a no-deal Brexit will have a massive impact on their ability to afford essential goods.
“UK consumers have benefitted from great value, quality and choice of food thanks to our ability to trade tariff-free with the EU.
“There is now the risk of a £3bn tax bill for the food we cannot source here in the UK. Unless we negotiate a zero-tariff deal with the EU, the public will face higher prices for their weekly shop.”
Last year, former Prime Minister Theresa May was criticised by the farming industry for putting together a no-deal Brexit tariff schedule which failed to provide protection for domestic cereal, fruit and vegetable, pork and egg production.
At the time, then-Defra Secretary Theresa Villiers defended the decision by saying the Government was trying to ‘get the right balance’ between preventing food inflation and protecting the agriculture sector.
Now some think-tank members, including Dom Walsh, a research fellow at Policy Exchange, are warning Ministers may revisit the current tariff schedule to make it more ‘liberal’ in the event of a no-deal Brexit.
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