No-deal Brexit will cost grocers £9.3 bn

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A no-deal Brexit will cost food and drink retailers £9.3 billion according to research by Barclays.

The study found grocers will face a 27 per cent average tariff from food and drink imported from the EU, with processed goods hit hardest.

Tariffs for non-food products would be in line for an average rise of between 3 and 4 per cent.

Each consignment of goods from the EU will also require a customs declaration which costs at least £50.

Items such as orange juice will hit the highest tariff rate of 31 per cent, compared to 29.5 per cent for semi-processed food and drink products such as white sugar.

Unprocessed foods will face a 9.7 per cent tariff.

Currently 71 per cent of the UK’s imported food and drink comes from the EU, with 60 per cent of the nation’s exports going to the EU.

Barclays’ report said it is likely the bulk of the £9.3 billion costs will be passed on to customers.

“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,” said Barclays head of retail Ian Gilmartin.

“A positive agreement on trade is essential if we are to protect UK exporters and avoid significant price rises for UK consumers,” he added.

The research comes after the British Retail Consortium warned average food prices could rise by almost a quarter if the UK leaves the EU without a tariff-free trade deal, leaving the burden on shoppers to shoulder the cost.

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