Grocers warned imposition of MFN tariffs could push up prices by 45%

Grocers warned imposition of MFN tariffs could push up prices by 45%

Retailers in the UK and Ireland have teamed up to warn about the impact they believe a no-deal Brexit will have on the prices of some food.

Should the UK leave the EU without a deal and trade between the two markets reverts to the WTO's "most-favoured nation" tariffs, the price of "some everyday food items" on sale in the UK could jump by up to 45%, retail organisations on both sides of the Irish Sea said.

A joint statement from The British Retail Consortium, The Northern Ireland Retail Consortium and Retail Ireland said no deal would put pressure on incomes and on availability.

William Bain, the head of EU and international divisions at The British Retail Consortium, underlined the links between the food industries of the UK, Ireland and the EU.

"Our supply chains are highly integrated, with food ingredients coming from both Ireland and the EU, and 60% of the GBP2bn (US2.6bn) of NI agri-food bound for Great Britain crosses the Irish sea via Dublin," Bain said.

Aodhán Connolly of The Northern Ireland Retail Consortium highlighted the relative incomes of those that live in Northern Ireland, compared to mainland Britain and south of the Irish border in the Irish Republic.

"A no-deal Brexit brings tariffs, customs processes, checks and costs which our industry, and Northern Ireland families in particular, cannot afford to absorb. Our households already have half of the discretionary income of British households and less than those in the Republic of Ireland. A no-deal Brexit will hit us first and hit us hardest. This is not acceptable," Connolly said.

Earlier this week, UK Environment, Food and Rural Affairs Secretary Michael Gove said the country planned to announce "shortly" proposed tariffs on some food products.

Yesterday, Ireland's food industry lobby body called for measures to offset potential tariffs on its exports to the UK in the event of a no-deal Brexit outcome.

In the joint statement from the retailers today (21 February), Thomas Burke of Retail Ireland said retailers would see an increase in costs whatever agreement - or otherwise - is reached between the UK and the EU.

"A 'no deal' Brexit would have devastating economic consequences and must be avoided. However, regardless of the type of Brexit agreed over the coming weeks, retailers will see an increase in their operating costs arising from checks at ports and other supply chain disruption. In the current operating environment, these additional costs simply cannot be absorbed and will have to be passed on to consumers in the form of higher prices. 

"Our members continue to work hard to plan for all possible eventualities, but the ongoing uncertainty is damaging our industry and impacting our customers."