UK retail industry warns of higher food prices with no EU trade deal
Britain's retail industry repeated a warning on Friday that shoppers face higher food prices from next year if new tariffs are imposed in the absence of a post-Brexit trade deal with the EU, Reuters reports.
The warning comes as prospects for a trade deal fade, with the end of the Brexit transition period on Dec. 31 fast approaching.
Prime Minister Boris Johnson said on Thursday there was a “strong possibility” Britain would not secure a deal.
If the U.K. finishes the transition period without a deal, it would trade with the EU - by far its biggest trade partner and fresh produce supplier - on World Trade Organisation terms, meaning new tariffs.
“Currently, four-fifths of UK food imports come from the EU and without a tariff-free deal, supermarkets and their customers face over 3 billion pounds ($4 billion) in tariffs from 2021,” said Andrew Opie, director of food and sustainability at the British Retail Consortium (BRC).
The BRC said tariffs would force food retailers to raise prices to mitigate the additional costs.
The organization also highlighted the challenges January posed for seasonal produce. A much higher proportion of fruit and vegetables is imported from the EU at that time of year. Britain sources 85% of its tomatoes from the EU in January versus 30% in June.
Under Britain’s new tariff schedule, which would apply from Jan. 1 if a deal is not agreed, 85% of foods imported from the EU would be subject to tariffs of more than 5%.
The average tariff would be more than 20%, including 48% on beef mince, 16% on cucumbers and 10% on lettuce.
Tesco, Britain’s biggest retailer, has said consumers should expect price increases of between 3% and 5% in the event of no deal.