The cost of importing food to Britain could rocket £9.3bn under a no-deal Brexit, new research from Barclays has warned.
If the UK fails to secure a deal following crunch talks with Brussels – and World Trade Organisation (WTO) tariffs are slapped on produce shipped into the UK from abroad – suppliers and retailers will be saddled with the additional costs.
Live poultry imports would face a 130% levy if WTO tariffs are imposed, Barclays warned, while frozen beef, orange juice and lamb would be hit with 298%, 180% and 82% charges respectively.
The Barclays Corporate Banking report suggested that a no-deal Brexit model would create an average tariff of 27% for food and drink supply chains – significantly more than the 3% to 4% expected for non-food products.
Every shipment of goods coming to the UK from the EU would also require a customs declaration, which would cost upwards of £50 each.
And Barclays said that the additional costs were “likely to end up being passed on to consumers” in the form of higher prices at the shelf edge as retailers scramble to protect already slim margins.
The UK imported £48bn of food and drink last year, accounting for around 40% of the British market.
Of those imported from the EU, almost three quarters of them entered the UK free of customs duties and other trade costs, Barclays said – a stark contrast to the situation faced by grocers and their supply chains in a no-deal scenario.
Ian Gilmartin, head of retail at Barclays Corporate Banking, said: “The food and drink industry is one of the country’s most important sectors, employing millions of people across the UK. For the good of both UK business and consumers, the potential impact on our producers and grocery retailers should be front and centre of Brexit negotiations.
“Some products would avoid tariffs, even in a no-deal scenario, but for most goods the effect of an increased tariff burden would be extremely damaging, and cheaper goods would be the hardest hit.
“Seventy-one per cent of our imported food and drink comes from the EU, and 60% of our exports go to the EU. A positive agreement on trade is essential if we are to protect UK exporters and avoid significant price rises for UK consumers.”