Brexit import charges and the subsequent increase in food prices have been a major concern for many in the catering industry in the UK.
With the recent announcement of increased import charges, there is fear of food price hikes hitting hard.
In today’s blog post we delve into the impact of Brexit import charges on your wholesale bill and how it could affect the food industry as a whole.
Understanding Brexit’s Impact on Import Charges
The departure of the United Kingdom from the European Union marked a significant shift in trade dynamics, introducing a new framework of import charges.
These levies are integral to the government’s strategy for fostering a competitive market environment and safeguarding local industries from unfair external competition.
However, an unintended consequence of these regulations is the escalation of costs for imported commodities, notably those in the food sector.
This development stems from the need to recalibrate trade agreements and tariffs that were previously governed by EU membership. With the UK now operating outside the EU’s single market and customs union, goods crossing the border are subject to additional scrutiny and tariffs, which can vary depending on the product type and origin.
This realignment has necessitated adjustments in how businesses approach importation, with many facing increased bureaucratic hurdles and costs.
The direct link between import charges and retail pricing is undeniable, as these added expenses incurred by importers and wholesalers are inevitably passed down the supply chain, affecting everything from procurement to final consumer prices.
Notably, the food industry, which heavily relies on the import of fresh produce, meat, and dairy products from EU countries, finds itself at the forefront of these challenges.
The necessity for quick transport of perishable goods adds another layer of complexity, making these items particularly vulnerable to price adjustments in response to the new trade barriers.
How much companies will have to pay to import foods from the EU due to Brexit
According to the Department for Environment, Food and Rural Affairs (DEFRA), small imports of products such as cheese, yoghurt, fish and salami, will be subject to fees of up to £145 from 30 April
Known as the “common user charge”, this fee will apply to animal products, plants and plant products entering the UK from the EU through the Port of Dover and the Eurotunnel at Folkestone.
It will be charged per type of good imported – the “commodity line” – and capped at £145 for mixed consignments. Individual products will face charges of up to £29 and will apply to goods deemed low, medium and high risk.
How Import Charges Translate to Higher Food Prices
The escalation of import charges in the aftermath of Brexit has a direct and tangible effect on the cost structure within the food supply chain.
As a wholesaler, we must grapple with these increased expenses and despite trying to absorb some of these increases, inevitably we need to raise our prices.
Naturally, these increases cascade down to the hospitality sector, encompassing restaurants and catering services, which are left with little choice but to revise their pricing strategies, thereby making the end products more expensive for their customers.
The impact is multifaceted, affecting not just the direct cost of imported goods but also influencing the price of locally produced food items.
Domestic producers may face increased costs for imported feed, fertilisers, or other inputs, which in turn, could lead to an uptick in the prices of locally sourced food.
This complex web of cost increases underlines the interconnected nature of the modern food supply chain and highlights the widespread implications of heightened import charges post-Brexit.
The Types of Food Most Affected by Brexit Increased Import Charges
Certain food categories have found themselves particularly vulnerable to the repercussions of increased import charges.
Among these, fresh produce stands out, with vegetables and fruit necessitating rapid transportation to maintain freshness, thus becoming significantly more expensive.
The dairy sector, too, feels the brunt of these charges. Products such as cheese, milk, and yoghurt, which are integral to the British diet, have seen prices escalate due to the complexities of cross-border trade post-Brexit.
What Can the Catering Sector do to Mitigate the Impact?
The catering sector can adopt various strategies to reduce the financial strain on their budgets as a result of the Brexit increased import charges.
Embracing the consumption of seasonal produce not only supports local farmers but also avoids the high costs associated with imported goods.
Similarly, by prioritising items grown or produced within the UK, the sector can contribute to strengthening the domestic agricultural economy, which is crucial in this period of adjustment.
Using a wholesaler, like Four Seasons, that offers a large selection of locally sourced foods can also reveal more affordable options.
See our recent blog post on rising bread prices.
