No-deal Brexit could lead to food shortages and price increases
The UK would see food inflation levels of over 5 per cent in the event of a no-deal Brexit, according to leading data and analytics company GlobalData.
The supply chain “chaos” would force inflation across core categories such as fresh fruit and vegetables.
On Monday, British supermarkets and major food chains signed a letter backed by the British Retail Consortium (BRC), warning Members of Parliament that leaving the European Union without a deal on March 29 would threaten food security and lead to higher prices.
Thomas Brereton retail analyst for GlobalData said that the British government has not provided enough information on how food prices, availability and regulations will be affected in the event of a no-deal Brexit.
“The supply chain chaos caused by a no-deal Brexit would force food inflation in 2019 to rise from 2.4 per cent– forecast under a soft Brexit – to upwards of 5.1 per cent as prices increase across core categories such as fresh fruit and vegetables,” Brereton said.
“The just-in-time supply chain that UK supermarkets operate on means that there is not the specialist infrastructure in place to deal with stockpiling – particularly of fresh goods – and [Monday’s] BRC letter is a signal that retailers are losing patience with a lack of information coming out of the Brexit negotiations.”
Brereton said that it will be difficult for retailers to stop prices shooting upwards if import costs rise as much as speculated. He said that the vulnerability of product lines such as fresh fruit and vegetables and the inability to stockpile these products will likely lead to shortages and price increases.