No-deal Brexit could cause food prices to soar by 45%, retailers warn

Food and drink production will be more expensive due to a combination of higher tariffs and new regulatory checks, experts say

Retailers have warned that a no-deal Brexit will lead to “unaffordable” price hikes on food and drink for customers in both the UK and Ireland as well as causing shortages of some everyday items.

Leaders of retail bodies said reverting to World Trade Organisation tariffs could make the cost of making fresh food and drink available to consumers increase by as much as 45 per cent – which is likely to be passed on to customers.

The warning comes days after Birds Eye boss Wayne Hudson said food prices were likely to rise by up to 20 per cent “virtually immediately” due to new tariffs.

Food and drink production will be made more expensive due to a combination of higher tariffs and new regulatory checks, according to Aodhan Connolly, director of the Northern Ireland Retail Consortium, Thomas Burke, director of Retail Ireland and William Bain, the British Retail Consortium Europe and international policy adviser.

Mr Bain said people in Great Britain will see the price of goods from Ireland and Northern Ireland rise.

“Our supply chains are highly integrated, with food ingredients coming from both Ireland and the EU, and 60 per cent of the £2bn of Northern Ireland agri-food bound for Great Britain crosses the Irish sea via Dublin,” he said.

“This will affect the price of shopping in the prime minister’s constituency of Maidenhead in the same way as it will in Belfast or Dublin, with cost rises.”

The retailers called for an end to “brinkmanship and political games”.

“A no-deal outcome would have devastating economic consequences, potentially jeopardising years of positive economic development and integration across the islands of the UK and Ireland,” Mr Bain added.

“It is imperative that this is avoided.”

Mr Connolly said: “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.”

“A hard Brexit means a hard border and the disintegration of supply chains that have been built up over 40 years of EU membership. This is not a binary choice for Northern Ireland between trade with the UK and trade with the EU.”

Mr Burke, of Retail Ireland, said that a crash Brexit would have devastating economic consequences.

He added: “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.”

Additional reporting by agencies