The Barclays Corporate Banking report predicted that food retailers and their supply chains would be affected by an average tariff of 27% on food and drink entering from the EU, more than the 3% to 4% that would hit non-food products.
According to the report, ‘retailers and wholesalers are entering a period of heightened uncertainty’.
Barclays Corporate Banking head of retail, Ian Gilmartin, said: “The food and drink industry is one of the country’s most important sectors, employing millions of people across the UK. A positive agreement on trade is essential if we are to protect UK exporters and avoid significant price rises for UK consumers.”
“No one has a crystal ball when it comes to the future. But looking at the history of the food and grocery sector, it’s likely that it will continue to rise to the challenges of this fast-evolving landscape.”
Additionally, every consignment of goods from the EU would require a customs declaration costing a minimum of £50.
The report stated: “Food and drink tariff rates will be higher than those in any other supply chain. All stages within the food supply chain will experience increased costs, with retailers hit disproportionately as processed goods attract higher duties than raw materials and semi-processed goods. Wholesalers will also experience significant cost increases, but to a lesser degree. The products that will be hardest hit are likely to be meat products, sugar, milk powder and cooked or preserved mushrooms.”
Last year, the UK imported £48bn of food and drink from the EU, which about 40% of the total UK market. Of these imports, 71% entered the UK free of customs duties and other trade costs.