Red tape and border checks could add £3 billion in costs for UK food importers and raise prices at supermarket checkouts, according to the UK Food and Drink Federation. Supermarket price rises threatened by a no-deal Brexit may have been avoided, but UK shoppers could still find prices creeping upwards. Britain's Food and Drink Federation believes border-crossing red tape could add £3 billion (€3.35 billion/$4.1 billion) a year in costs for food importers — up around an 8% on pre-Brexit days. The UK buys about half of its food from abroad, with the majority coming from the European Union. Before Brexit, UK food insecurity was already increasing as the coronavirus pandemic held up supply chains. The London-based Felix Project, a food-waste redistribution charity, believes Britain's food insecurity will worsen in 2021. In 2020, the charity provided the equivalent of 21 million free meals. This year they estimate that will rise to 38 million meals. The double whammy of the virus's economic fallout and the extra Brexit costs could worsen the UK's food insecurity, said Mark Curtin, chief executive of The Felix Project, "We are already facing huge demand," Curtin said. "This will only be further exacerbated because of the need to help people who are finding it difficult to afford quality food." So too the Agriculture & Horticulture Development Board estimates expenses increasing by 5% to 8% for livestock products and 2% to 5% for trade in crops. Tesco, the UK's largest supermarket chain, offers a counter argument, saying as a no-deal Brexit has been avoided, increased administrative fees for trade should hardly be felt by shoppers. However, UK food exporters could face issues. Most meat processing workers or crop pickers come from outside the UK. With the end of freedom of movement, labor shortages could risk raising their prices too. "We are moving from a situation where we had frictionless trade to one where we have a great deal of friction," said Dominic Goudie, the federation's head of international trade. "Any suggestions that these costs will not lead to an increase in food prices should be taken with a really hefty pinch of salt." As suppliers, already squeezed by thin margins, count the new costs of the split from the bloc, the question is who is going to bear the brunt. "There could be a tempestuous set of discussions to come between suppliers and supermarkets, who are ever-aware of the need to be price-competitive," said Will Hayllar, a partner in the consumer goods practice at OC&C Strategy Consultants Ltd. in London. Supermarkets have stockpiled key goods, but there are concerns about fresh produce supplies as shippers adjust to new border protocols, Andrew Opie, director of food and sustainability at the British Retail Consortium, said in a statement. The UK has planned a six-month grace period for customs checks, while the EU hasn't agreed to the same, meaning food-filled trucks still may get snarled on that side. "It's good news for the industry that a deal has been reached," Baker said. "But it's inevitable that changes lie ahead." — Agencies
