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Customers will really feel the affect of a no-deal Brexit at grocery store tills, the British Retail Consortium has warned.
The BRC mentioned tariffs would add £3.1bn a yr to the price of importing food and drinks until the UK and EU can strike a free commerce settlement.
“If there is no such thing as a deal earlier than Christmas, the rise in tariffs will go away retailers with nowhere to go apart from to lift the value of meals,” it mentioned.
The federal government mentioned it was “working arduous” to achieve a deal.
Andrew Opie, director of meals on the BRC, mentioned coronavirus was “already making life arduous for shoppers”, significantly these on decrease incomes.
“A no-deal Brexit could have an enormous affect on their capability to afford important items,” he added.
The EU is the UK’s largest buying and selling associate and the supply of 80% of its meals, the BRC mentioned.
But when the UK is unable to achieve a cope with the bloc, the typical tariff on meals it imports could be over 20%, the commerce physique warned.
These tariffs embrace a 48% levy on beef mince, 16% on cucumbers and 57% on cheddar cheese.
Beneath a brand new tariff schedule, set to come back into impact in January, 85% of meals imports from the EU will probably be topic to a tariff of greater than 5%, the BRC mentioned.
The longstanding post-Brexit promise is of free commerce offers that can lower taxes on imports – known as tariffs – and decrease costs for shoppers.
However ought to no commerce deal be reached with the EU, from January, one of the crucial noticeable impacts would be the new UK World Tariff making use of to imports of food and drinks from the EU.
Understandably, supermarkets have labored out the price of making use of these new tariffs on this British Retail Consortium train on their very own provide chain knowledge – the full is £3.1bn subsequent yr, versus zero this yr. That’s value about £112 per family.
As an illustration, if the complete value of the tariff have been handed on to shoppers a £Three pack of Irish beef mince may value £4.08 and Spanish cucumbers may value 47p as an alternative of 43p.
In apply, some – however not all – these value will increase could be handed on, and a few decrease tariffs on imports from different locations may offset these rises.
However issues about tariffs on EU food and drinks imports are one of many points troubling retailers.
The BRC additionally mentioned will increase in “bodily checks, paperwork, and different non-tariff obstacles” will additional push up the associated fee for retailers.
“With coronavirus affecting the livelihoods of hundreds of thousands of individuals within the UK, many households can in poor health afford increased costs for his or her weekly meals store,” it mentioned.
It claimed that the UK grocery sector is “one of the crucial aggressive on the earth”, working on tight margins.
Because of this, it mentioned, any extra prices could be handed on to clients.
“UK shoppers have benefitted from nice worth, high quality, and selection of meals due to our capability to commerce tariff free with the EU,” Mr Opie mentioned.
“There’s now the danger of a £3bn tax invoice for the meals we can’t supply right here within the UK.”
A authorities spokeswoman mentioned: “Negotiations are ongoing and discussions will probably be persevering with on the subsequent formal spherical in Brussels subsequent week.”
“The UK is a big importer of meals and different items, and avoiding tariffs needs to be useful to either side, significantly given our shared dedication to excessive regulatory requirements.
