A no-deal Brexit could lead to tariffs of 40% or more being imposed on food such as beef and cheddar cheese, driving up prices in shops and squeezing household budgets across the UK and Ireland, retail organisations from both countries have warned.
With mounting fears that the UK could leave the European Union without an agreement in 36 days’ time, 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 on 29 March comes at a time in the year when the UK imports a lot of fresh, out-of-season, produce – 90% of the lettuce consumed in Britain, 80% of tomatoes and 70% of soft fruits come from, or arrive via, Europe.
Increased tariffs, the devaluation of sterling and new regulatory checks would drive up the cost of fresh food and drink, which would be passed on to consumers, the retail bodies warned.
Tariffs are border taxes charged on foreign imports. Importers pay them upon entry to the customs agency of the country or bloc imposing them.
Tariffs can be levied in different ways. It can be a flat-rate tariff linked to weight, or calculated as a proportion of the overall value of the goods. It can also be a mixture of both. A country can set a quota, enabling a certain volume of a product to flow in before a higher tariff rate kicks in.
Tariffs raise money for governments, but are primarily used to raise the price of foreign goods, protecting domestic producers from global competition.
Countries signed up to the World Trade Organization (WTO) must impose tariffs at the same level for all other WTO-member trading partners under the organisation’s “most favoured nation” rule – unless they secure alternative deals with particular countries or trading blocs.
If the UK leaves the EU without a deal, both fall back on the World Trade Organization’s most favoured nation tariffs, which means import duties on everyday food items from fruit to cheese.
This would mean a 42% tariff on imported cheddar, 46% on mozzarella, 40% on beef, 21% on tomatoes and 15.5% on apples, the BRC said.
Ornua, the Irish dairy company behind the Kerrygold brand, started stockpiling cheddar in the UK last autumn as a safeguard against a big price hike in the event of a no-deal Brexit.
Last year one of the UK’s largest dairy producers, based in Northern Ireland, warned that leaving the customs union under a hard Brexit could lead to the price of meat doubling in the UK and the price of dairy, half of which is imported, rising by up to 50%.
Half of the UK’s food arrives through Dover and Folkestone; the proportion of fresh produce is even higher. While the government has leased ferries on six new port routes, medicines and chemicals for water purification will get priority over food, and not all ports are suitable for the sort of roll-on roll-off ferries that operate on the Calais-Dover route.
Andrew Opie, director of food and sustainability at the BRC, said: “We cannot easily find an alternative to imports through Calais where there are frequent ferry sailings and the Channel tunnel. The volumes of fresh produce imported through there are enormous, for example at peak periods there are approximately 130 lorries a day passing through with just citrus fruits.”
The three retail groups warned that a no-deal outcome would have “devastating economic consequences, potentially jeopardising years of positive economic development and integration across the islands of the UK and Ireland”.
Aodhán Connolly, of NIRC, said 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.”
Thomas Burke, of Retail Ireland, said that even if there were some form of agreement, prices in shops were likely to go up, with struggling retailers unable to absorb cost increases arising from checks at ports and other supply chain disruption.
