No deal Brexit could result in price increases
UK shoppers could pay up to a third more for everyday food items in the event of a no deal Brexit, according to new analysis.
The British Retail Consortium (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 European Union (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%, according to the Tariff Roadmap.
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 World Trade Organization (WTO) tariffs.
Andrew Opie, director of food policy at the British Retail Consortium, says, “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.
He later adds, “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.”