sugar

We’ve seen a plethora of headlines make claims that the new tariffs will slash 26p off a bag of sugar

As the debate over Brexit rages, one of the biggest problems for the food industry is that those who are best qualified to understand the possible impacts are the most cautious to comment, while those who have a very limited understanding are quick to put their oar in.

Take the UK temporary tariff schedule, which government published on Wednesday after Theresa May’s EU withdrawal deal faced its second defeat in the Commons. In addition to being published criminally late, the new system, which would apply for 12 months in the event of a no-deal Brexit is - in the words of FDF CEO Ian Wright - “confusing and complex”.

It includes some zero tariffs, some new tariffs and some tariff-free quotas. Some UK food products have been protected, and others haven’t - with very little explanation as to why. What’s more, the government has decided no tariffs will be applied to goods that cross the border between Ireland and Northern Ireland. Although no one really seems to understand exactly how that would be enforced.

All these complexities mean many companies importing food into the UK - and their trade bodies - have been reluctant to speak out about what the possible implications might be, both for consumer prices and their bottom lines.

And yet we’ve seen a plethora of headlines make claims that the new tariffs will slash 26p off a bag of sugar, or push up the price of gouda slices by 30p, both of which on closer inspection look totally wrong.

We’ve done our best to assess some of the impacts the tariffs might have for food prices in the UK, but even if you fully understand the complicated new system and its TRQs and FTAs there are still so many uncertainties around Brexit it’s almost impossible to make any firm predictions.

Tariffs aren’t the only factor influencing food prices, either. Another crash in sterling after a no-deal Brexit, for example, would have a big impact on margins. And who knows what would happen if we have a long delay to Article 50, or a second referendum. Indeed, the only certainty seems to be, when it comes to Brexit, that more uncertainty lies ahead. 

 

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