Failure to secure a good EU trade deal could lead to an increase in the cost of basic food items, meaning more families are thrown into food poverty, a new report has warned.
Non-partisan advocacy group Best for Britain have today published a report looking at the impact that leaving the EU’s single market and customs union at the end of this year could have on food prices in the UK. Calling for the UK government to strike an “affordable food deal”, the report cites import tariffs that will be applied to tinned foods and basic goods and warns that increased costs at a time of economic fragility could see families fall into food poverty.
Basic food items like tinned tomatoes, olive oil, beans, pasta and pulses now face import taxes. Pasta, for example, is a staple food with around 343,200 tonnes brought into the UK each year. If the new tariff regime creates a 6% tariff, the average price of a packet of pasta will rise from 53p to 65p. Using the indicative basket of goods in Table A, Best for Britain's analysis reveals the UK Global Tariff could add £250 to a household's yearly food costs next year. The report also highlights the threat posed by low-quality cheap cuts of meats imported from countries like the US and Australia as the UK attempts to build new trade links around the world after Brexit.
The report includes new polling conducted by YouGov on the issue of food prices. Of 1648 people asked, 59% said they thought the price of daily essentials such as food and groceries would increase if the UK left the EU without a deal, including over a third of Conservative and Leave voters (36% and 35%, respectively). The cost of groceries and other goods in shops ranked fifth in a list of issues people said were the most important facing them, with nearly a quarter of respondents (22%) citing it as an issue for them and their family.
Best for Britain's Affordable Food Deal report comes in the same month that a report was published by a cross-party group of MPs for the Environment, Farming and Rural Affairs (EFRA) committee. The EFRA report said that while the UK's food supply chains had held up during the COVID-19 pandemic, leaving the EU without a good deal this year could "pose potentially greater challenges".
Food poverty, which the UN defines as a lack of physical and economic access to sufficient, safe and nutritious food, is currently affecting 4.9 million adults plus 1.7 million children in the UK, and was exacerbated by the pandemic. Use of food banks in March and April effectively doubled compared to the same time last year at the same time as donations were squeezed.
Examples of changes under new UK Global Tariff for basic food items
UK Global Tariff
Increase per item
Current RSP of own-label item at an indicative major UK retailer*
Domestic production / FTA import?
|Tinned vegetables (sweetcorn, 326g)||4% + £7.80/100kg||3.4p||50p||6.8%||Currently no country with an FTA with the UK|
|Baked beans||16%||4.2p||30p||7.1%||UK production is available but would not meet UK demand, would create monopoly and reduce competition|
|Tinned fruit (canned peaches, 400g)||18%||7p||80p||8.75%||South Africa is the only exporting country with an FTA with the UK. Cannot meet UK demand. Any potential FTA with the US would not provide a solution as freight costs would offset duty gain|
|Dried pasta (penne, 500g)||6% + £20/100kg||12p||53p||22.6%||UK production is possible but is very small and could not meet volume requirements|
|Pulses (tinned red kidney beans, 400g)||16%||6p||55p||10.9%||UK production is possible, but only one UK facility can tin pulses, meaning imports would still be necessary|
|Tinned meat (Prince's canned beef, 430g)*||16%||30p||£2.50||12%||While some corned beef is already imported from outside the EU (and may incur a duty), affordable brand Prince's canned beef would currently incur a UK Global Tariff duty|
|Tinned tomatoes (400g)||14%||4p||35p||11.4%||The UK currently has no FTA with any countries which produce tinned tomatoes|
|Evaporated milk (400g)||£36/100kg||18p||65p||27.6%||No evaporated milk production facility exists in the UK|
|Olive oil (Napolina, 400ml)*||£104/100kg||50p||£1.50||30.3%||No import duty applies if oil is refined in the UK, but it is if bottled. Unlikely the UK has the capacity to refine all oil domestically|
Source: Best for Britain analysis of UK Government guidance 'UK tariffs from 1 January 2021'
*Where own-label RSP data has been unavailable, price has been taken from an affordable, widely available branded product.
The minimum price increase for the collection of items in Table A would be £1.35. If this indicative shopping basket provides a family of four with roughly two days of nutritious meals, this would add around £246.38 to a household’s food bill per year.
Table A represents a conservative estimate, based on the UK Global Tariff and other import and consumer data. Other administrative costs and supply issues could increase prices even further. For example, the extra administrative burden now published by the Government for customs clearance of up to £46 per container will add significant costs to business, which may be passed on to UK consumers. Other factors contributing to an increase in food prices include the value of the pound sterling which, since the referendum has fallen, leading to some small price rises.
Best for Britain CEO, Naomi Smith said:
"As the UK faces the worst recession in living memory, increases in the price of food could have a devastating impact on low-income families, food banks and those already struggling to overcome the challenges of Covid.
"We echo the concerns of food suppliers, food retailers and charities working to end food poverty in the UK that the imposition of tariffs on EU food imports will lead to a rise in the cost of everyday food items, and a possible deterioration of quality if the government moves to import cheap substitutes from places such as the United States.
"The best way to guarantee staple food items can remain affordable for families is for the UK Government and the EU to strike a comprehensive free trade agreement before 31 December 2020 that grants reciprocal barrier-free access for food."
Director General at the British Food Importers & Distributors Association, Walter Anzer said:
"Many of the everyday items our members import for UK supermarkets and the food services sector will soar in price and reduce in availability without a comprehensive deal with the EU that secures affordable and good quality food.
“Anyone who has tinned tomatoes, dried pasta and olive oil in their store cupboard should be worried about the effect on them if the government turns its back on working properly with EU neighbours.”
About the poll
Poll conducted by YouGov. Total sample size was 1,648 adults. Fieldwork was undertaken between 22nd - 23rd July 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Data tables can be downloaded here.