Retailers could be hit with a “debilitating” £8bn spike in the cost of consumer goods if the UK fails to strike a deal with the EU.
Research by consultancy Retail Economics and law firm Squire Patton Boggs has claimed that additional import duties in the event of a hard Brexit would add £7.8bn to Britain’s import duty bill.
Higher import costs from the introduction of new tariffs could leave goods such as chocolate carrying an import duty of around 30%, while clothing and footwear items may suffer an average tariff of 11%.
Retail Economics chief executive Richard Lim said businesses needed to be aware of the risks if a “hard Brexit scenario becomes a reality following a transition period”.
Lim added that grocery retailers would “face the toughest challenge”, since “almost three quarters of what we eat is imported from the EU”.
“Some tariffs on meat and dairy products would rise to more than 80 per cent, causing an inevitable surge in food inflation to hit families,” he said.
And he warned that amid “softening consumer demand and mounting cost pressures”, additional tariffs on such a scale would “amount to a tipping point with some retailers unable to remain commercially viable”.