New post-Brexit controls due to be introduced from next January will hit UK consumers by driving up the price of food and risking supply-chain disruption, the food and logistics industry has warned.
The concerns emerged after the UK government this week published proposals to charge a flat-rate inspection fee of up to £43 on each consignment of food coming from the EU.
Since the EU-UK trade deal came into force in January 2021 the UK government has not imposed full border checks on food imports from the bloc, but has announced its “firm intention” to phase in controls from this October.
Industry bodies argue the proposed charges, which range from £20 up to £43, will hit smaller firms and UK families at a time when they are already grappling with rampant food-price inflation.
Nichola Mallon, head of trade at Logistics UK, the haulage trade body, said the charge was “very concerning” given current price-pressures. “It is too high and if introduced, will add to inflationary pressures and is likely to lead to market distortion in the movement of goods,” she said.
Shane Brennan, the director of the Cold Chain Federation added that the proposals made little sense at a time when the government was actively discussing imposing price controls on UK supermarkets to keep down the cost of staple foods.
“It is crazy that one week the government is holding a crisis meeting in Downing Street to discuss out-of-control food inflation and the next is willing to nod through a multimillion new import tax on EU food imports,” he said.
UK food and drink price inflation hit a 45-year record of 19.2 per cent in March, and remained stubbornly high in April at 19.1 per cent — more than double the country’s headline inflation rate — even as its European neighbours saw their rates ease considerably.
In Germany, food inflation fell from 17.2 per cent in April to 14.9 per cent in May, while in the Netherlands the rate dropped from 15.6 to 14.8 per cent.
The UK’s disproportionately high inflation is in part down to post-Brexit border arrangements. When Britain left the single market, the food trade was hit particularly hard as manufacturers faced tighter regulatory controls and longer delays when moving perishable goods across the border.
According to research by the London School of Economics, Brexit’s impact on food prices has cost each household £250 since December 2019, or £6.95bn for the entire UK. About 28 per cent of food consumed in the UK comes from the EU.
Industry groups also warned that the flat-rate charges, which according to the government proposal will be levied on “each eligible item listed in a customs declaration”, would discriminate against smaller businesses.
William Bain, head of trade at the British Chambers of Commerce said that for tens of thousands of importers and their EU suppliers, this new charge would amount to a new “entry tax” for everyday food products as they entered Britain.
“With food price inflation running way in advance of the headline inflation rate, this would be a wrong ‘tax’ on business at the wrong time. Its impact would be particularly harsh on smaller importers bringing in smaller, lower value shipments,” he said.
The agriculture department, Defra, did not immediately return a request for comment.
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