Could Brexit make my food more expensive?

On January 1, Britain will stop following the EU rules and we will have a new trade relationship with Europe.

We still do not know what that relationship will be, but the effect will be felt by everyone in their shopping basket.

Just over a quarter of all food consumed in the UK is produced in the EU.

Although the UK left the EU on January 31 this year, trade with the EU continued as before. Spanish lettuce, Dutch tomatoes, French wine and Danish bacon entered the UK without border controls and without the UK government imposing import taxes, known as tariffs.

After January 1, the rules change but a deal is still being negotiated, but there are two main possible outcomes.

Under WTO rules, supermarkets and other importers would have to pay substantial tariffs on many foods they bring in from the EU.

Meat and dairy products face particularly high tariffs, but many other areas, including fruits and vegetables, would also be affected.

As an extreme case, the London School of Economics estimates that some specialty cheeses such as halloumi and roquefort could be 55% more expensive.

(Tariffs don’t just apply to food; cars made in the EU, for example, attract a 10% tariff. But food and beverages are the area where the highest tariffs apply.)

Government Minister George Eustice said prices on average would rise less than 2%, although he admitted that some items such as pork and beef would be more affected.

In the short term, stores could absorb those additional costs themselves. But, in the long run, they would likely pass some or all of that cost on to customers, in the form of higher prices.

Tariffs are not the only reason prices could go up.

Retailers will have to complete more paperwork when bringing food into and out of the UK, and producers may have to comply with different regulations on different sides of the channel. All of which cost money.

That means that even if there is an agreement that cuts all tariffs on EU imports to zero, prices could still go up.

Adding up all those costs, the London School of Economics estimated that a trade deal would see an average price increase of 4.7% for non-branded food products imported from the EU. Without an agreement, they would rise 12.5%.

More than half of all food consumed in the UK is currently produced in the UK. That ratio could be increased, but there are problems.

Some foods are easier and cheaper to produce in sunnier locations, especially when they are out of season in the UK. The UK could look for new suppliers for those products outside the EU, buying from Morocco rather than Greece or Italy, for example. But those imports can also be subject to tariffs, and longer distances would mean higher transportation costs.

In any case, it would take a while for supermarkets to find new suppliers, either at home or abroad, so there could be a delay.

UK meat producers also say that if tariffs made it impossible to export parts of animals that are difficult to sell in the UK, such as pig trotters, they would have to charge UK consumers more to make up for the loss.

Agriculture and food processing also currently employ large numbers of EU immigrants, who will find it more difficult to enter the UK next year when the new rules come into effect. This could make it difficult to expand food production.

Leaving the EU means the UK is free to agree to new trade deals with non-EU countries, which could lower tariffs and give British buyers access to cheaper food from countries like the US or Brazil. . However, trade agreements take a long time to negotiate.

The UK can cut tariffs without making trade deals, but WTO rules say it has to offer the same terms to all countries that don’t have a trade deal. So you could cut tariffs on EU imports to zero, as long as you cut tariffs to zero across the board.

That would make a lot of food cheaper, but it would be devastating for many UK farmers who would find it difficult to compete with cheap imports.

A no-deal scenario would mean significant additional paperwork for products currently entering the UK without any border processing.

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The National Audit Office has warned that a “generalized outage” is likely to occur from January 1.

Many retailers have been stockpiling food in preparation for this, but perishable items cannot be stored, and some could be in short supply in the first few months of next year.