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Supermarket and Fast Food Chiefs ‘Extremely Concerned’ About No-Deal Brexit

Supermarket and fast food bosses write open letter to MPs warning about price increases, which will hit the customer

General View Of Morrisons Supermarket
How expensive do you like them apples?
Christopher Furlong/Getty Images

Those in charge of Britain’s major supermarkets and biggest fast food restaurants have co-signed an open letter to Members of Parliament issuing a stark warning about the risks associated with leaving the European Union with no deal.

The letter, which is co-signed by the bosses of supermarkets ASDA, Marks & Spencer, Waitrose, Sainsbury’s, Co-op, Lidl, and Costcutter; retailers Pret, KFC, and McDonald’s; and the British Retail Consortium outlined the following concerns, relating to supply chain, tariffs, price rises, and reduction in choice for the consumer:

Food Supply Chains

  • Nearly one third of food consumed in the U.K. comes from the EU.
  • From early spring, percentage of imports from EU is greater as fresh, perishable goods are in higher demand: 90 percent of lettuce, 80 percent of tomatoes, and 70 percent of soft fruit is sourced from the EU.
  • Timing is important — produced needs to be moved from source to chilled storage quickly.

What no-deal would mean: New checks at the British border will delay transit of goods — complicating the ability to keep goods fresh.

The open letter urging MPs to not leave the EU without a deal

Food Tariffs

  • Currently only 10 percent of food imported to the U.K. is subjected to tax because of intra-EU trade deals currently in place.
  • Import costs would rise. The price to the consumer would in turn be driven up.
  • Even if the U.K. were to set import tariffs at zero, and the Government would theoretically subsidise food imports, the authors of the letter say it would have a “devastating impact on U.K. farmers,” because the EU is unlikely to reciprocate by setting exports from Britain at zero for those importing in the EU.

Food Storage

  • Supermarkets and fast food restaurant bosses emphasised that they have sought to mitigate risk by stockpiling goods. But they’ve run out of storage.
  • These companies are also limited in what they are able to freeze. Fresh salad, for example, cannot be frozen.

Customers will be worst hit

  • Price hikes will hit customers, bosses warn.
  • Customers will be faced with less choice, since those companies will either not be able to afford to import and retail certain foods, or logistically it will be too challenging to even try.

Members of the restaurant and hospitality industry have been warning against such a scenario for months.

As things currently stand, Britain is scheduled to leave the European Union without a deal on 29 March 2019, despite these warnings.

More soon.