UK Edition
Foreign Secretary Dominic Raab has insisted that a no-deal Brexit will not cause food prices to surge after Tesco’s chairman warned the political deadlock risks triggering a 5pc rise and other retailers warned of a £3bn tariffs hit.
Mr Raab said he was not worried about empty supermarket shelves despite grocers stockpiling ahead of the end of the transition period.
He sought to allay fears of tariffs and border disruption hitting groceries, saying the Government did not “recognise” Tesco chairman John Allan’s prediction of prices rising by an average of 3pc to 5pc in a no-deal Brexit.
This morning [Fri] the British Retail Consortium (BRC) has said supermarkets face a £3.1bn “tariff bombshell” on food and drink that would push up prices for consumers.
Andrew Opie, director of food and sustainability at the BRC, said: “It is alarming that there has still been no deal agreed with the EU... The ongoing uncertainty surrounding the new checks and red tape that will apply from 1 Jan will create disruption in the supply of many goods.”
However, Mr Raab said: “It’s worth just remembering that 30pc of our food supply comes from the Continent, 50pc is UK supply and 20pc comes from the rest of the world.”
He told BBC Breakfast. “Actually, we have got quite diverse food supply chains... Of all of the things that will be a challenge, I’m not concerned about either supermarket cupboards running bare or the cost of food prices.”
There are fears that tariffs from trading with the EU on World Trade Organisation terms will push up food costs, and disruption to imports at the borders will stop products reaching shelves.
Mr Raab’s denial of food supply disruption came despite a leaked government document in August revealing fears of shortages.
On Wednesday, Mr Allan predicted the UK “may see some shortages of fresh foods” if no agreement was reached with the EU.
He also warned that tariffs in a no-deal Brexit would “almost inevitably” lead to higher prices.
“I think if we go out on a no-deal basis that is unavoidable,” he told Bloomberg TV. Mr Allan said that Tesco had stockpiled “as much as we can of long-life product” and had diversified shipments away from the port of Dover amid fears it would become a bottleneck for imports.
However, he predicted any disruption would be short-term and last only a few months.
Pressure has already been mounting on Britain’s ports in recent days, as pent-up demand following lockdowns and stockpiling clog up the global shipping system.
Mr Opie from the BRC said there was “no need for consumers to stockpile” as a no-deal Brexit would largely impact upon fresh produce such as fruit and vegetables that “cannot be stored for long periods by either retailers or consumers”.
He said: “Retailers and suppliers are increasing the stock of tins, toilet rolls and other longer-life products as part of their planning for a no-deal Brexit so there will be sufficient supply of the very products consumers might otherwise wish to stockpile.”