The cost of supermarket staple items, such as beef, cheese, and oranges, will surge if the UK leaves the Brexit transition period without inking a trade deal with the European Union, the country’s retail industry warned on Friday.
The British Retail Consortium (BRC) has determined that the price of beef, which is heavily imported from Ireland, will climb by 48% once tariffs are applied in a post-Brexit scenario.
The price of cheddar cheese — another item imported in large quantities from Ireland — will climb by 57%.
About 80% of UK food imports come from the EU, and imports from the bloc are also crucial to supply chains in the fashion and homeware sectors, the BRC noted.
If a tariff-free trade deal with the bloc is not negotiated in time for the end of the Brexit transition period on 31 December, tariffs of over 5% will be applied to some 85% of foods imported from the EU.
The average tariff on EU food imports would be over 20%, which would push up prices significantly.
As a result, oranges from Spain will cost at least 12% more, while porcelain kitchenware will have a 12% tariff applied. Cucumbers will see a price jump of 16%.
“With the clock ticking down to 31 December, the government must put consumers first and agree a deal that avoids tariffs and minimises the impact of non-tariff barriers,” said Andrew Opie, the director of food and sustainability at the BRC.
Retailers, already struggling with the impact of the coronavirus crisis, will be dealt a further blow if consumers are faced with price hikes.
The BRC’s warning comes after the second week of “intensified” negotiations with the EU failed to break the Brexit deadlock.
Michel Barnier, the bloc’s chief negotiator, said on Thursday that “significant divergences remain” between the UK and EU.
The scant progress comes in spite of the UK and EU agreeing to step up the pace of discussions in recent weeks, following five previous rounds of ill-fated trade negotiations.
The failure of this week’s talks further raises the prospect of a crash-out exit from the current transition arrangements, which would result in the imposition of the tariffs that the BRC is warning of.
Both sides have until then to agree to a trade deal, a timetable experts say is almost unheard of.
The deadline for an agreement of an extension to the negotiating timetable passed last week, meaning that, unless a deal is agreed, the UK will leave the transition period without a trade accord.