BRC warns of higher supermarket prices if Brexit deal fails

Supermarkets and their customers will face a £3.1 billion tariff bombshell on food and drink if the UK leaves the EU customs union and single market without a free trade deal, according to the BRC.

There is a "strong possibility" of a no deal Brexit, Boris Johnson has warned.

The Prime Minister has told British citizens and businesses to "make proper preparations" for the scenario, which would come into effect on 1st January 2021.

Brussels' current offer "isn't right for the UK" and a trading relationship, like the one Australia has with the EU, would still be "very good", he claims.

But the BRC isn’t convinced and warns that agreement is needed to reduce checks and delays for imported goods.

With coronavirus affecting the livelihoods of millions of people in the UK, many households can ill afford higher prices for their weekly food shop, it adds.

Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, says: “It is alarming that there has still been no deal agreed with the EU. 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 in tariffs from 2021.”

“Furthermore, retailers will need time to implement the aspects of any deal, and the ongoing uncertainty surrounding the new checks and red tape that will apply from 1st January will create disruption in the supply of many goods.”

Retailers have spent huge amounts of time and money preparing ahead of 1st January, he adds, increasing the stock of tins, toilet rolls and other longer life products as part of their planning for a no deal Brexit, so there will be sufficient supply of essential products.

“They have also been building new customs and VAT processes, working with suppliers to ease logistics, and more – but with so many unknowns, some disruption for consumers and businesses is inevitable.”

“Retailers are doing everything they can in time for 1st January, but no amount of preparation for retailers can entirely prevent disruption to food and other essential goods that come from or through the EU.”

“With negotiations entering the 11th hour, protecting UK and EU consumers from billions in tariffs must be the top priority,” he concludes.