BREXIT COULD HIKE GROCERY BILLS BY €1,300

Average family’s food costs would soar if import tariffs are imposed

A ‘NO deal’ Brexit could add more than €1,300 on to the annual grocery bill of the average Irish family, a startling report released today reveals.

If Britain leaves the European Union without a trade deal in place, World Trade Organization tariffs will immediately come into effect.

This would mean even basic foodstuffs – such as milk, bread and cheese, which people frequently wrongly assume are all produced here from Irish ingredients – would be badly hit and soar in price.

A two-litre bottle of milk costs €1.49 in most major supermarkets, but would rise in price by 46% if no trade deal is reached, pushing the cost up by a significant 68c to €2.17, according to the analysis by respected think tank, the

Economic and Social Research Institute.

Half a dozen eggs would rise by 87c from around €1.90 to €2.77, and a sliced pan would go up by 30% from around €1.50 now to €2.

The ESRI report reveals that a hard Brexit would mean an annual increase in Irish families’ grocery bills of between €892 and €1,360.

The report’s co-author, Martina Lawless, said: ‘As Ireland imports a considerable amount of food products from the UK, a hard Brexit could have an immediate impact on the cost of living.

‘Unfortunately, we find that this impact would likely fall disproportionately on lower-income households.’

Isolde Goggin, chairwoman of the Competition and Consumer Protection Commission which commissioned the report, said that to prevent passing on severe price hikes on foodstuffs to customers, Irish businesses need to ‘act now’. She said: ‘There is still a huge degree of uncertainty.

‘Although the true impact of Brexit will be unknown for some time, this research makes the potential impact on households more tangible. The findings further inform our understanding and will help Ireland to develop the appropriate responses.’

The research used a database of 4,500 products imported from the UK under two scenarios.

The first is where a trade deal is agreed and tariffs are avoided but products are hit with significant non-tariff barriers such as costs arising from extra time spent at customs or due to labelling rules and other regulatory standards.

The average family would see their grocery bill increase by €892 under this scenario.

The second, far worse scenario – if Britain leaves the EU with no trade deal in place – would hike family grocery bills here by €1,360 on average.

Britain is one of Ireland’s largest and closest trading partners – with more than €2.5billion worth of goods crossing the Irish Sea every month. Only trade with the US is greater at just over €5billion a month. However, we import more from Britain than the US.

And because a large proportion of our milk goes towards making our cheese and butter, we have to import a quarter of our drinking milk from the North or Britain.

Report author and DCU professor of economics, Edgar Morgenrot, said: ‘Milk and meat tends to have the highest tariffs.

‘Some types of beef you’re looking at over 50%, under World Trade Organization rules.

‘A thousand euros is a lot of money, and we don’t know where we’re going to be, so it’s somewhere between the worst-case scenario and the current state of affairs. It is a significant amount.

‘So if we don’t have a good deal at the end of it and we revert to WTO tariffs, this is what it’s going to look like and it’s not pretty.’

CCPC chairwoman Ms Goggin added: ‘The implications of the research highlight an important opportunity for domestic businesses, particularly the food industry, in the form of import substitution.

‘In order to take this opportunity, Irish businesses need to take action now. The cost-of-living increases could be significantly mitigated if Irish businesses seize this opportunity.’

A hard Brexit would increase the cost of living for all households by

‘It’s not going to be pretty’

2% to 3.1%, the ESRI stated.

Inflation is currently 0.5% but a surge in food prices could raise that sharply, putting pressure on companies’ wage demands.

Responding to the ESRI red flag, Consumers’ Association of Ireland chief Dermott Jewell said: ‘It is worrying. There needs to be strong consideration of any decision not having the effect of boosting prices, because that’s the last thing that either economy needs.’