A new report from the House of Commons EFRA Select Committee entitled “Brexit: Trade in Food,” has led to the British Retail Consortium reiterating its stance on what a no-deal Brexit will mean for the UK.
A summary of the report says that the UK’s food and farming industry generates over £110 billion a year and employs one in eight people in Britain.
“Trade is vital to the industry. The EU is the UK’s single largest trading partner in agri-food products, accounting for 60 percent of exports and 70 percent of imports,” it says.
“Brexit will inevitably introduce friction to trading routes. Our report focused on the impact to different agri-food sectors of the UK having to trade under World Trade Organization (WTO) rules, in the event that the UK and EU fail to reach a trade Agreement.”
The report goes on to say that in withdrawing from the EU, the UK will withdraw from the Common Agricultural Policy (CAP).
Helen Dickinson OBE, Chief Executive of the British Retail Consortium says that the report provides a “constructive contribution” to the debate on the cost of a no-deal Brexit to the UK’s food industry and the consumers it serves.
“We’re pleased the report echoes some of the points we advanced in our submission,” she says. “If the UK leaves the EU with no trade agreement, the average WTO tariff of 22 percent that would be applied to imports, would increase prices for consumers.”
“With personal finances already under increasing strain from inflationary pressures, this would be an unappetizing hit to their weekly food bills. Given that over two-thirds of our food that is imported comes from the EU to supplement UK production, the scale of this potential impact is clear.”
“The report rightly acknowledges that the answer does not lie in unilaterally dropping tariffs to zero, due to the devastating consequences this would have for the UK’s agricultural industry. The focus, therefore, has to be on maintaining tariff-free trade to secure the choice and availability of affordable goods for consumers.”
This latest report comes ahead of a crucial month for Brexit negotiations and reiterates the need for certainty and clarity on the rules that will govern the UK’s future trading relationships – something that the food industry as a whole has been urging the government to do for many months.
“It (the report) lays bare the cost of imposing new tariff and non-tariff barriers on retailers and other businesses, with consumers ultimately set to pay the price,” Dickinson adds.
“It’s not just new tariffs that will put upward pressure on consumer prices. The Government is unreserved in its intention to leave the Customs Union, so it is essential that we agree customs and border controls that allow food to continue to move uninterrupted across borders.”
She also calls for an agreement to be reached on the issue of sanitary and phytosanitary standards (SPS) which will have a decisive impact on the UK’s ability to import products without delays.
“We’ve been absolutely clear that any friction introduced to the flow of goods, particularly fresh and perishable ones, will lead to spoilage, gaps on shelves and ultimately higher prices for consumers,” Dickinson concludes.
Earlier this month, the UK Food and Drink Federation renewed its calls for frictionless trade with the EU post-Brexit and for the government to secure the benefits of existing EU preferential trade arrangements, at least until the government can replace them with acceptable alternative arrangements.
