Brexit fears over drink and food costs confirmed by leaked papers

By Michelle Perrett

- Last updated on GMT

Fears are that customs checks could bring increased costs
Fears are that customs checks could bring increased costs

Related tags United kingdom European union International trade

The government-leaked Brexit papers have confirmed industry concerns that food and drink costs could spiral after Brexit.

Earlier this week papers from the study, titled the ‘EU Exit Analysis – Cross Whitehall Briefing’​ were revealed to Sky News.

It said food and drink costs could go up by as much as 16% due to non-tariff barriers. The report also said that Britain’s retail sector could be hit by a 20% rise in costs while agriculture was estimated to be impacted by costs of up to 17%. 

Non-tariff barriers include the impact of extra customs checks, administration and paperwork.

A Food and Drink Federation (FDF) spokesman said: “FDF has repeatedly stated that the food and drink sector will be one of the industries most affected by Brexit, and the latest leaked assessment papers are acknowledgement from government that they believe this to be the case too. Government has a duty to share this analysis with the sector so businesses can prepare.”

The FDF also said that food and drink’s success was built on a close trading and regulatory relationship with the EU for over 40 years.

Status quo

“We are calling on government to lock down a status quo; no change transition period by March so business can have confidence in day one readiness on both sides of the Channel. In terms of our future relationship, it is vital that the negotiations achieve four key outcomes – frictionless, tariff-free trade, access to our valued EU workforce, a stable regulatory regime and a special deal for Ireland.”

While the British Retail Consortium (BRC) did not want to be drawn on the details of the leaked report, it said that a deal was needed to ensure strong customs co-operation between the UK and EU to maintain the frictionless flow of goods.  

A BRC spokeswoman said: “Getting this right and preventing non-tariff barriers is essential to ensuring UK consumers are able to buy the products they want after Brexit.

“With annual customs declarations in the UK estimated to rise from 55M to 255M on the expiry of a transitional period, a no-deal Brexit could mean new delays at ports of up to two to three days. For consumers, this would affect availability on shelves, increase food waste and push up prices.”

The BRC said agreements on security, transit, haulage, drivers, VAT and other checks would be required to get systems ready for Brexit.

Customs Declaration Service

The government has already said that its new Customs Declaration Service, would be able to deal with the extra customs entries due to Brexit.

However, the UK Warehousing Association (UKWA) said it was concerned about the ability of the system to cope with an estimated 200M extra customs entries that would result from Brexit.  

UKWA’s ceo Peter Ward said: “Arguably, this single most important issue will affect all our lives – it is critical, not just for businesses, but for everyone who depends on the seamless flow of goods into and out of our country, that we get this right.

“We don’t yet know where this will end – ‘hard’, ‘soft’ or any other kind of Brexit, one thing we know for sure is that it will bring challenges for our industry on an unprecedented scale.”

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