LONDON (UK) – In the wake of the prospects for a post-Brexit trade pact with the EU appearing to be precarious, the retail industry in Britain warned on Friday that shoppers could face a hike in food prices next year in case new tariffs are imposed without a deal.
In case there is no agreement, Britain would have to conduct trade with the EU on World Trade Organisation terms, which means that new tariffs would kick in.
There was a strong possibility that Britain would not reach an agreement, said Prime Minister Boris Johnson on Thursday.
“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).
According to BRC, the tariffs would force food retailers to hike prices to bring down the additional costs.
Several non-food retailers would also face large tariff bills for products coming from the bloc such as clothes and ceramics.
As per the new tariff schedule of the nation, which would be applicable from January 1, if there is no agreement, as much as 85% of foods imported from the bloc countries would be subject to tariffs of more than 5%.
On average, the new tariff would be more than 20%, including 48% on beef mince, 16% on cucumber and 10% on lettuce.
The nation’s biggest retailer, Tesco, said consumers should brace for price increases of between 3% and 5% if there is no agreement.
“I don’t quite accept the numbers that Tesco’s are putting out,” Culture Secretary Oliver Dowden said.
He said the government had suggested a tariff impact on prices of at most “around 2%”.
The BRC also stressed on the challenges posed by January on regional produce. At that time of the year, a much higher quantity of fruit and vegetables is imported from the bloc members. The country sources 85% of its tomatoes from the EU in January compared with 30% in June.
Retailers have increased stocks of tins, toilet rolls and other products that have a longer shelf life.