With just some days till the tip of the transition interval, and with British freight hauliers quickly banned from travelling to France, we nonetheless don’t know if a free commerce deal can be struck between the UK and EU. But, even when a deal could be agreed and permitted earlier than January 1, 2020, British shoppers want to organize for the truth that their procuring payments are about to get much more costly.
Though a good 52% of the UK’s meals wants are presently met by home manufacturing, the rest is closely depending on imports from the 27 European Union (EU27) nations. About 29% of the meals consumed within the UK comes from the EU27 in comparison with simply 4% every from the areas of Asia, Africa and the Americas
The UK’s reliance on the EU is particularly acute within the horticulture sector, with about 40% of greens and 37% of fruit bought within the UK imported from EU nations.
Right now of 12 months, exterior of the British rising season, the nation’s dependence on Europe is much more stark, with virtually all of tomatoes, lettuces and smooth fruit coming from the Netherlands and Spain.
Simply how this commerce can be affected will depend upon the end result of the present negotiations. A no-deal situation clearly poses the most important problem. The UK could be legally required to use the identical tariffs on EU items as for different World Commerce Group (WTO) members with which it doesn’t have a free commerce settlement.
These tariff charges differ between totally different foodstuffs and are typically fairly low for contemporary fruit and greens (sometimes round 10%), excessive for drinks and drinks (20%) and even increased for meat and dairy (as much as or increased than 40%).
Analysis means that the tariff impact of no deal would result in meals value inflation of an estimated 3.1% for fruit and 4.0% for greens.
Further prices and meals waste
Simply how a lot of this extra value could be handed on to the patron is but to be seen, since retailers could desire to soak up it or, extra doubtless, try to cross it onto their suppliers.
Though these tariffs would solely be relevant within the occasion of no deal, the identical can’t be mentioned for different Brexit prices that companies and shoppers will incur in 2021, even with a deal.
These so-called “non-tariff boundaries” come within the type of further pink tape, together with customs and guidelines of origin declarations, in addition to checks on plant and animal imports.
One pissed off trade affiliation chief in October 2020 shared their ideas:
As one pissed off trade affiliation chief informed us in October, no matter deal the UK strikes will create further prices and delays for the contemporary fruit and vegetable sector. They identified a scarcity of preparedness round “simply in time” provide chains.
An extra concern is the UK’s Sensible Freight IT system, which is designed to stop site visitors chaos by making certain haulage vans have the right paperwork earlier than they arrive at ports. But it surely received’t be prepared in time for the tip of the transition interval.
The implications of this failure – which can be felt largely on the Dover-Calais artery the place most imported meals is landed – might spark the suspension in January 2021 of perishable meals transport by UK and EU corporations.
Even brief time delays of some hours, coupled with the extra value of doing enterprise exterior of the Single Market and Customs Union, will cascade by way of the UK’s just-in-time provide chains. Certainly, the present journey restrictions could also be a portend of what cross-channel commerce might appear like in early 2021, with UK supermarkets already warning of doable meals shortages.
Recent fruit and greens are perishable and any delay will scale back shelf-life and lead inevitably to extra meals waste. It’s shoppers who will finally be choosing up the invoice for this within the type of diminished alternative and excessive costs.
As a result of affordability is the most important determinant of client behaviour, meals value inflation is more likely to drive down demand for fruit and greens – particularly by low revenue households – at a time when the federal government actually should be sending the very reverse sign.
Not least since unhealthy diets have proved a key danger issue throughout the COVID-19 pandemic.
Tony Heron receives funding from the ESRC and BBSRC.
Bob Doherty receives funding from UKRI International Meals Safety Fund BBSRC.