Report warns hard Brexit could increase import cost by £6bn
A hard Brexit could see as much as £6 billion added to the cost of imported food and drink from the European Union, according to a report from Retail Economics and law firm Squire Patton Boggs.
The report, Navigating the Road Ahead: Cost of Sourcing Retail Products Abroad, said that failure to agree a trade arrangement would force the EU and UK government to resort to a Most Favoured Nation model with standard tariffs.
These rates are particularly onerous for food and drink, which is currently imported tariff-free. In the case of meat and dairy, tariffs are sometimes in excess of 80%, while chocolate can be as much as 40% and produce 20%.
With some 72% of the UK’s food and drink imports coming from the EU, the report said that there was limited scope for alternative sourcing opportunities due to existing trade barriers and high tariffs.
To continue tariff-free trade, the EU is likely to demand compliance with a wide range of non-trade regulations.