May 10, 2018 / 12:54 AM / 5 months ago

UK food prices likely to rise without a Brexit deal - report

LONDON (Reuters) - Food prices are likely to rise after Brexit if no trade agreement with the EU is reached, a parliamentary report said on Thursday, and there could be shortages of some products.

A woman prepares food in a restaurant, in central London January 18, 2011. REUTERS/Stefan Wermuth

The report, by the House of Lords European Union Committee, urges the government to develop a comprehensive food security policy for Britain.

Half of Britain’s food is imported and 30 percent comes from the EU, with another 11 percent coming from non-EU countries under trade deals negotiated by the EU, the report noted.

“It is inconceivable that Brexit will have no impact on EU food imports to the UK,” it added.

If a trade agreement cannot be negotiated, Brexit is likely to result in an average tariff on food imports of 22 percent, the report said.

“While this would not mean a 22 percent increase in food prices for consumers, there can be no doubt that prices paid at the checkout would rise,” it added.

To counteract this, the government could cut tariffs on all food imports, EU and non-EU, but this would pose a serious risk of undermining British food producers who could not compete on price.

“EU food imports cannot easily be replaced by either producing more in the UK or importing more from non-EU countries,” the report said.

Prime Minister Theresa May has insisted Britain will not stay in a customs union with the EU after it leaves but the committee said it was unclear how “frictionless” imports of food from the EU would be able to continue without a deal.

“If no agreement is reached, and food imports from the EU are subject to the same customs and border checks as non-EU imports, the UK does not have the staff, IT systems or physical infrastructure to meet that increased demand,” it said.

“Any resulting delays could choke the UK’s ports and threaten the availability of some food products for UK consumers.”

The report called for a food security policy to be introduced urgently.

“A long-term view is needed on whether to prioritise food standards or food prices, whether to reverse the UK’s declining self-sufficiency or increase imports,” it said.

Other factors should include workforce shortages, priorities for investment, and bigger, global issues such as the impact of climate change on food production worldwide.

“This would be needed regardless of Brexit, but we urge the government to use the challenges and opportunities that leaving the EU will pose to the UK’s food supply as a spur to develop its strategy as a matter of priority,” the report concluded.

Reporting by Stephen Addison; editing by Estelle Shirbon

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