One thing is very clear - no food retailer was consulted about the scheduling of Britain’s departure from the European Union. The end of March is one of the busiest times for imports of fresh produce, just before British seasonal production comes on stream. It is also two weeks before Easter when supermarkets will be stocking up for the long break. Except for early December, it’s hard to think of a more problematic time for Brexit to be scheduled for and this will only exacerbate the impact on our supply chains and British consumers.
We have consistently made clear the consequences that delays at ports will have on imports of perishable products. The technical notices published by Government have done little to persuade us otherwise. The UK Government’s light touch approach to imports will make little difference if key ports are clogged up with British vehicles trying to get in to Europe.
But an issue that has had less attention recently is the impact of tariffs. The UK Government has suggested it will mirror the tariffs the EU levies with third countries. A quick examination of our Tariff Roadmap exposes the subsequent threat to British consumers. Almost 80 per cent of food imports are from the EU and, on average, tariffs would move from zero to 22% adding big pressure to the supply chain. In fact, taking into account trade deals with other countries currently only 11 per cent of food imports attract tariffs.
The difficulty for the Government is that food consumers, of which we are all, are likely to be the first to feel the impact of a “no deal Brexit”. The Government does, however, have options as an independent trading country. It can lower tariffs completely or offer reduced tariffs on a quota basis. However, if it does that it needs to make that offer to every country, increasing competition for our domestic food producers who, at the same time, will face tariffs on their products to their main export market, the EU.
There is an argument for limiting action to food we don’t produce here such as rice or citrus fruit but that won’t make much of a dent in increased food prices as the bulk of our EU imports are meat, dairy and fresh fruit and vegetables.
So the option open to the Government is to cut tariffs more widely to insulate consumers from the worst of price rises but risk catastrophic damage to our domestic food supply chain. Our latest analysis demonstrates this clearly with a case study on the impact on domestic beef production. The Government could give emergency support payments to British farmers but ultimately that means customers as taxpayers paying the bill for it for it via a different route.
All of this confirms two things. Firstly, we need to avoid no deal and secure a zero tariff deal with the EU, with the associated transition period to avoid chaos at our ports. Secondly, and importantly for planning in the medium-term, our future food supply has to be aligned to our agricultural policy. There is little mention of food in the new Agriculture Bill when, surely, we should be framing support and incentives for our farmers within the context of our future food trading relationship with Europe and the rest of the world. We would then be able to deliver for UK consumers an efficient, quality domestic plan for farming within the context of a progressive global trade policy.
By Andrew Opie, Director of Food and Sustainability at the British Retail Consortium
Read our new analysis - 'Universal Cut In Tariffs Not The Panacea'
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