£9.3bn cost of no-deal Brexit

By Aidan Fortune

- Last updated on GMT

A no-deal Brexit could cost the food and drink industry £9.3bn
A no-deal Brexit could cost the food and drink industry £9.3bn
The impact of Brexit is to be felt up and down the supply chain, with food manufacturers fearing a knock-on effect if no trade deal is agreed between the UK and the EU.

This follows a report from Barclays estimating that a no-deal Brexit could cost UK retailers and their supply chain £9.3bn due to the introduction of tariffs on food and drink products.

Scale, Disruption and Brexit – a new dawn for UK food supply chains? outlined that food retailers would be hit by an average tariff of 27% on food and drink items imported from the EU.

Category tariff

However, some items would be subject to a category tariff as well as a specific duty tariff, such as frozen beef – which would be subject to a duty of 298% – or live poultry, which would have a duty of 129.7%.

According to the report, the UK imported £48bn worth of food and drink from the EU in 2017, representing 40% of the total market. Of this, 71% of the produce was tariff-free.

The report estimated that the £9.3bn additional cost might be passed on to the consumer. However, one UK food manufacturer who did not wish to be named, expressed concern that this cost could be passed on to suppliers by the retailers.

Clawing back costs from producers

“If retailers are faced with additional costs due to the introduction of tariffs on food and drink, we worry that they could claw some of these costs back from producers and we may not be in a position to refuse,” ​said the manufacturer.

Meanwhile, the organic food sector has called for a clear contingency plan to ensure the continued trade of organic produce with the EU,​ should the UK be faced with a no-deal Brexit.

Related topics: Business News, Supply Chain, Brexit Debate

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