Food prices in Britain are set to rocket if the U.K. is unable to secure a free trade deal with the European Union (EU), a report by the House of Lords warned Thursday.
A bleak assessment by the upper house of Britain’s parliament said that failure to secure a tariff-free deal would split Britain into two post-Brexit, with the wealthier able to buy more expensive food and poorer households left to buy below-par imports.
Half of Britain’s food is imported, with 30 percent from EU countries and 20 percent from the rest of the world.
Cheddar cheese is predicted to be one of the biggest causalities if Britain agrees no deal and trades under World Trade Organization (WTO) rules. Wholesale prices could rise by more than a third, with retail prices increasing by 20 percent.
The hike is partly down to Britain importing around a third of its cheddar cheese from EU member Ireland, while nearly 20 percent of Ireland’s milk is used for cheddar destined for the U.K., according to the Irish Dairy Industries Association.
British shoppers could pay up to 29 percent more for beef, while the price of tomatoes could rise by anything between 9 and 18 percent.
According to predictions made by the U.K. Trade Policy Observatory, British shoppers could fork out 5.8 per cent more for meat and 4 percent more for vegetables.
“If Brexit were to affect the price or availability of food, it would be felt by the whole population very quickly,” the report said. “If an agreement cannot be negotiated, Brexit is likely to result in an average tariff on food imports of 22 percent.”
The House of Lord’s EU subcommittee warned that “there can be no doubt” that food prices in the U.K. would rise because of Brexit.
To counteract food price hikes, it recommended that the British government cut tariffs on all food imports, but warned that doing so would seriously risk “undermining U.K. food producers who could not compete on price.”
Committee chairman Lord Teverson slammed government ministers for not worrying about the potential impact of Brexit on the availability of food, despite concerns raised by representatives from Britain’s farmers, importers and ports.
“Throughout our inquiry there was a striking contrast between government confidence and industry concerns,” he said. “The government has some important choices to make.”
Article sourced from www.cnbc.com