Grocery costs may rise after Brexit, warn peers

SHOPPERS face significant hikes in food bills if the government fails to secure a free trade deal with the European Union, peers have warned.

In a bleak assessment of the impact of Brexit, they suggested grocery costs would rise, businesses could go bust and round year supplies put at risk.

Customers could be left in a two-tier system that means the better off buy more expensive, British goods while those who are poorer are left with lower-standard cheap imports.

Peers said there was a “striking” contrast between government confidence about the potential impact of Brexit on the price and availability of food and concerns raised by the industry.

The UK’s ports would be choked up with delays if EU food imports are subject to the same border checks as other imported produce, the House of Lords’ EU Energy and Environment sub-committee warned.

Allowing them through with few checks would raise safety concerns, it added.

Peers said even though it was unclear yet what any potential agreement could have it was “inconceivable” that Brexit would have no impact on EU food imports to the UK.

“If an agreement cannot be negotiated, Brexit is likely to result in an average tariff on food imports of 22%,” the report said.

“While this would not equate to a 22% increase in food prices for consumers, there can be no doubt that prices paid at the checkout would rise.

“To counteract this the government could cut tariffs on all food imports, EU and non-EU, but this would pose a serious risk of undermining UK producers who could not compete on price.”

The committee found that it would not be possible to increase food production in time to meet any shortfall caused by Brexit.

Reductions in EU labour could lead to an increase in recruitment or higher wages for workers by paying higher wages, but the costs may have to be passed on to customers or some businesses “may cease to be viable”.

Peers said it was unclear whether the government’s goal is maintaining or reducing food prices, or maintaining high animal welfare and food safety standards..

The report said Brexit could mean those who can afford it will buy high-quality local produce while those who cannot may have to turn to cheaper imports that “could be produced to lower standards”.