A no-deal Brexit could lead to food shortages and tariffs of up to 45 per cent which will “squeeze’ household budgets across the UK and Ireland, retail organisations have warned.
Since it looks increasingly likely that the UK could leave the European Union without an agreement, the British Retail Consortium (BRC), Northern Ireland Retail Consortium (NIRC) and Retail Ireland, issued a joint warning that this outcome could lead to “delays at borders and shortages of fresh meat, fish, fruit and vegetables”.
The scheduled withdrawal date from the EU, the 29th March, comes at a time in the year when the UK imports large quantities of fresh produce from Europe.
Increased tariffs, the devaluation of sterling and new regulatory checks would drive up the cost of fresh food and drink, the retail bodies warned.
If the UK leaves the EU with no deal, trade between the two jurisdictions will fall back on the World Trade Organization’s ‘most favoured nation tariffs’, which means import duties on everyday food items.
This would mean a 42 per cent tariff on imported cheddar, 46 per cent on mozzarella, 40 per cent on beef, 21 per cent on tomatoes and 15.5 per cent on apples, the BRC said.
“This will be devastating to families already struggling to pay for the weekly shop,” David Lammy, the Labour MP, said. “Decent MPs from all parties must work together to stop food shortages and higher prices pushing more into poverty.”
Bord Bia, the semi-state body which promotes the Irish food industry, said it cannot comment on “speculative price increases for imported foods for Irish consumers” but made clear that it is working with Irish exporters on “maintaining current trading relationships with UK customers”.
“Exporters are preparing for a hard Brexit through a number of steps: Identifying tariff classifications; modelling the potential impact of custom duties and tariffs on UK sales; and planning and managing for potential customs processes,” Bord Bia’s Overseas Trade Manager, Shane Hamill, told the Irish World.
Ornua, the Irish dairy company behind the Kerrygold brand, started stockpiling cheddar in the UK last autumn as a safeguard against such a spike in tariffs.
William Bain, Head of EU and International at the British Retail Consortium said: “It is not just the people on the island of Ireland that this will affect. Those in Great Britain will see the price of goods from Ireland and Northern Ireland rise.
“Our supply chains are highly integrated, with food ingredients coming from both Ireland and the EU, and 60 per cent of the £2 billion of NI agri-food bound for the Great Britain crosses the Irish sea via Dublin.”
Retail Ireland warned that a no-deal outcome would have “devastating economic consequences” that would jeopardise “years of positive economic development and integration across the islands of the UK and Ireland”.
Thomas Burke, of Retail Ireland, said: In the current operating environment, these additional costs simply cannot be absorbed and will have to be passed on to consumers in the form of higher prices.
Aodhán Connolly, from the NIRC, added that people in Northern Ireland would be hardest hit.
“Our households already have half of the discretionary income of British households and less than those in the Republic of Ireland. A no-deal Brexit will hit us first and hit us hardest. This is not acceptable.”