Food and Drink sector faces £9.3bn tariffs on EU products under no-deal Brexit
Just when you think it can’t get any worse for the Hospitality Industry
Food and drink sector faces £9.3bn tariffs on EU products under no-deal Brexit: The food and drink sector could face additional tariffs totalling £9.3bn per year for products imported from the EU if a Brexit settlement isn’t reached, according to a new report. The Barclays Corporate Banking report projected that in a no-deal Brexit, food retailers and their supply chain would be affected by an average tariff of 27% on food and drink entering from the EU, significantly more than the 3% to 4% levy that would hit non-food products. Additionally, every consignment of goods from the EU would require a customs declaration costing a minimum of £50. The report stated: “Food and drink tariff rates will be higher than those in any other supply chain. All stages within the food supply chain will experience increased costs, with retailers hit disproportionately as processed goods attract higher duties than raw materials and semi-processed goods. Wholesalers will also experience significant cost increases, but to a lesser degree. The products that will be hardest hit are likely to be meat products, sugar, milk powder and cooked or preserved mushrooms.” Last year, the UK imported £48bn of food and drink from the EU, about 40% of the total UK market. Of these imports, 71% entered the UK free of customs duties and other trade costs. While a free trade deal or the “Chequers option” would help the food industry avoid tariffs and related duties, a no-deal Brexit could mean significantly higher costs for retailers and consumers. Barclays Corporate Banking head of retail Ian Gilmartin said: “The food and drink industry is one of the country’s most important sectors, employing millions of people across the UK. A positive agreement on trade is essential if we are to protect UK exporters and avoid significant price rises for UK consumers.”
Source: Propelinfo