A no-deal Brexit could cost the food and drink industry up to £9.3 billion, a new survey suggests.
Research by Barclays has suggested that crashing out of the EU without a deal will result in average tariffs of 27 percent on food and drinks coming from the bloc.
Ian Gilmartin, head of retail at Barclays Corporate Banking, said: “Some products would avoid tariffs, even in a no-deal scenario but for most goods, the effect of an increased tariff burden would be extremely damaging, and cheaper goods would be the hardest hit.”
“71 percent of our imported food and drink comes from the EU, and 60 percent of our exports go to the EU. A positive agreement on trade is essential if we are to protect UK exporters and avoid significant price rises for UK consumers,” he added.
Brexit backers have dismissed the research as “scaremongering”, with Ruth Lea, an economic adviser to the Arbuthnot Banking Group, calling the research another example of ‘project fear”.
“Any government that was thinking of cost of living could cut tariffs. It would be progressive and help the lowest income groups. This is just scaremongering,” she said.
The report, which is titled ‘Scale, Disruption and Brexit – a new dawn for UK food supply chains?’ warns that the price of frozen beef could rise by as much as 298 percent. Foods including cream and garlic could also rise by as much as 81 and 71 percent respectively and driving up prices for shoppers.
The UK imported £48 billion of food and drink last year, this is around 40 percent of the total amount sold.
Tariffs for non-food products are expected to have an average rise of between three and four percent.