No Deal Brexit Could Cost UK’s Food Retailers £9.3bn, Says Barclays

British food retailers could face costs of close to £9.3 billion if there is no formal Brexit deal agreed between the UK and the EU in the coming months.

That warning has been issued by the banking group Barclays, which is convinced that a no-deal Brexit scenario could be hugely damaging for businesses across the UK’s food retail sector and within its associated supply chains.

The prospect of tariffs being added to food and drink products coming into the UK from the EU is high on the list of concerns for Barclays and for the companies that stand to be affected by them.

Barclays estimates that a no-deal Brexit could push the average tariff level up to 27 per cent across the food and drink supply chain.

The bank has also said it would expect to see every consignment of goods coming in from the EU required to make a customs declaration at a cost of no less than £50.

An estimated £48 billion worth of food and drink was imported into the UK last year, which accounts for around 40 per cent of the nationwide market as a whole.

Of these imports, around 71 per cent are believed to have originated from EU locations and entered the UK without any customs duties or trade costs being incurred or applied in the process.

There are hopes that the UK and the EU will agree a post-Brexit free trade deal which limits the costs to food and drink importers but Barclays is convinced that a no-deal situation as of April next year could well result in “significantly higher costs for retailers and consumers”.

“The food and drink industry is one of the country’s most important sectors, employing millions of people across the UK,” said Ian Gilmartin, head of retail at Barclays Corporate Banking.

“Some products would avoid tariffs, even in a no-deal scenario, but for most goods the effect of an increased tariff burden would be extremely damaging, and cheaper goods would be the hardest hit.”