Posted: 22/10/2020

Importers and producers warn of ‘stark’ no-deal price rises

Importers and producers warn of 'stark' no-deal price rises

Independent food importers have warned of dire consequences across the sector if ministers fail to strike a trade deal with the EU before the end of the year.

Companies supplying small retailers across the UK said tariffs resulting from a no-deal Brexit would lead to price hikes at a hugely difficult time for the industry.

The Government has published a list of global import taxes that will come into effect on 1st January for all shipments into the UK that don’t benefit from specific trade agreements or exemptions. 

Kamil Shah, co-founder of Middlesex-based Greek food importer Olive Branch, said the £1.04 tariff to be applied to each kilogram of extra virgin olive oil coming through the border was “stark”.

“This can be up to 30% of the retail price for some supermarket brands. We sell at a higher price but it’s still almost 10%.”

Shah said he was “concerned” about potentially having to put prices up further just after Christmas with winter restrictions due to the coronavirus still likely to be weighing heavily on retailers.  

“If our £12 litre of olive oil becomes more expensive then, naturally, consumers’ instincts are to shop around and find cheaper alternatives.”

Guy Tullberg, managing director at Wiltshire-based condiment maker the Tracklement Company, said the company had been forward buying ingredients from Europe ahead of the UK’s full exit from the union. We have been buying extra and we’ve got contracts that cover us until the next crop. 

“Most of our imported raw products are in the UK already,” he said. 

“But we are an artisan manufacturer, making multi-ingredient products with many ingredients and packaging items. Any one of those costs rising by 15% might see the end price go up 7% – and any conversation above inflation is a hard one with everything that’s going on.” 

Emma Macdonald, co-founder of Devon-based food manufacturer Bay Tree, said she had deliberately avoided spending too much time and energy on preparing for Brexit when so much of the landscape is unknown.

“Raw material suppliers have contracted with us for 12 months from this September and nothing has changed yet in their prices but there could be a Brexit clause in the detail,” she admitted.

“We have swallowed minimum wage increases but any costs that rise now will impact on prices. 

“There is nothing worse than the unknown. With COVID-19 and Brexit on top of it people will give up – they will get so frustrated.”

A Department for International Trade spokesperson said: “The UK Global Tariff is tailored to the UK economy and designed to back British businesses, ensuring they compete on fair terms with the rest of the world.”

Global import taxes (UK)*
Extra virgin olive oil £104 per 100kg
Tomatoes (fresh or chilled) 8% in winter, 14% in summer
Onions (fresh or chilled) 8%
Garlic (fresh or chilled) 8% plus £100 per 100kg.
Sweet peppers (fresh or chilled) 6%
Fresh mozzarella £154 per 100kg
Croissants 8%
Strawberries (fresh) 10%
Raspberries (fresh) 8%
These figures apply where no trade
deals or exemptions are in place
*from 1 January 2021

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