The British Retail Consortium (BRC) has warned that supermarkets and their customers face a £3.1bn ‘tariff bombshell’ if the UK leaves the EU without a trade deal.
The UK’s transition period will end in three weeks and with talks at an impasse, there is growing concern the UK will be left to trade on World Trade Organisation (WTO) terms.
Last night the Prime Minister said there is now a “strong possibility” the UK will not a strike a post-Brexit trade deal. It came after Boris Johnson’s meeting with European Commission President Ursula von der Leyen ended with both sides agreeing to set a Sunday deadline for trade talks.
“With just weeks to go, it is alarming that there still has been no deal agreed with the EU, putting customers in line for a £3bn tariff bombshell,” said Andrew Opie, director of food and sustainability at the BRC.
The industry body has warned that grocers will be forced to hike food prices to offset the new import taxes on goods from the EU.
“Without a deal, the increase in tariffs will leave retailers with nowhere to go other than to raise the price of food to mitigate these new costs,” it said. “Many non-food retailers will also face large tariff bills for EU-sourced products, meaning the total cost to UK retailers and their customers will be even higher.”
According to the BRC’s estimates 85 per cent of foods imported from the EU will face tariffs of more than five per cent. The average tariff on food imported from the EU would be over 20 per cent, which would include 48 per cent on beef mince and 57 per cent on cheddar cheese.
“Retailers are doing everything they can in time for 1 January, but no amount of preparation for retailers can entirely prevent disruption to food and other essential goods that come from or through the EU,” said Opie.