Pig Sector: BMPA Pork Supply Chain Report

British Meat Processors Association
British Meat Processors Association

Food bills set to rise by 12% with a no-deal Brexit, supermarkets warn

This week, the UK’s largest supermarkets issued a stark warning in The Times that a no-deal Brexit would force up the price of the average weekly shopping trolley by as much as 12%. You can read the full article here

That figure is an average expected price increase, but some staples are expected to rise considerably more because of tariffs. For example, beef is expected to rise 40%, chicken 22% and cheese 44%

WTO tariffs that would be imposed after a no deal exit are just one cause of potential price increases. There are other, less obvious but equally serious drivers that could affect food prices depending on the deal we strike with the EU.

The plunge in the value of Sterling since the referendum has seen the cost of imported meat rise considerably. For some meat processors who import up to 40% of their raw materials, this is a significant increase in costs some of which are resulting in higher prices to the consumer.

Delays at ports due to customs checks would also have an inflationary effect. They may force importers to use alternative ports at a higher cost to avoid the expected congestion at the main ports. Also, the extra time to get goods checked and into the country will impact the shelf life of certain fresh and chilled products.

An example of how these delays will impact would be beef. Beef has to processed into mince or burgers within 6 days from the time of slaughter. If port delays put this time limit in jeopardy, some of the big buyers will have to consider the option of importing ready-made mince products, which would both increase the cost to consumers and effectively outsource those meat processing jobs abroad. 

So, while high WTO tariffs might be hitting the headlines, the real cost will also be counted in time delays, weaker buying power of the Pound and UK job losses as firms source product from overseas suppliers.

The Times article says that MPs and the Treasury are now ‘waking up’ to the realities of what a no deal Brexit means.  Let’s hope they heed the warnings but meanwhile, BMPA will continue to voice the less understood and often hidden implications of Brexit.

About BMPA

The British Meat Processors Association (BMPA) is the leading trade association for the meat and meat products industry in the UK.

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The government has listened to meat industry warnings and pushed this plan back 12 months — more reality in face of post-#brexit regulatory enforcement capacity constraints.

https://britishmeatindustry.org/updates/defra-agree-to-move-new-rule-deadline-by-one-year/ https://twitter.com/pmdfoster/status/1587000818875744264

Huge relief that Defra has agreed to postpone new export rules by one year.
But there's still work to be done, and BMPA is looking forward to working with them to help devise a new system that's going to be needed to implement the new rules successfully.
👉https://bit.ly/3tFPt1j

This leaked letter from George Eustice comes as no surprise. But what else are we currently capitulating on?

Our warnings about the Oz trade deal went unheeded
👉https://bit.ly/3Uzfawc

Other countries have sector experts inside the tent during negotiations.....The UK doesn't.