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Brexit will lead to higher food prices for customers and suppliers, warns industry body

Mirror logo Mirror 3 days ago Emma Munbodh

Brexit red tape is likely to increase food supply costs, leading to higher prices for retailers and consumers, the Food and Drink Federation (FDF) has warned.

The industry body told MPs there will be short and long-term costs to "re-engineering" supply chains - and businesses may not be able to absorb the costs.

There will be extra food supply chain expenses due to more bureaucracy, Food and Drink Federation chief executive Ian Wright told the Future Relationship with the European Union Committee on Wednesday.

The Cabinet Office said it was working closely with businesses to resolve issues.

"Unless the deal changes in some material way, we're going to see the re-engineering of almost all the EU-UK and GB-NI supply chains over the next six to nine months," Wright said.

a close up of a flag: The FDA said the government had struck a deal with the European Union too late for food and beverage companies to prepare themselves © AFP via Getty Images The FDA said the government had struck a deal with the European Union too late for food and beverage companies to prepare themselves

"In the short term there will be costs and time wasted for supply to reach the shelves, and in the long term will be costs and changes, and fairly significant changes, to the way in which manufacturers in the UK and in the EU interact when they are producing product," he said.

A spokesperson at the FDF said hospitality closures mean many firms may not be able to absorb the costs.

"Food and drink manufacturers typically operate on tight margins and given the challenges many face because of the closure of the hospitality sector, it will not be possible to simply absorb the added costs that will result from border disruption and new non-tariff barriers."

Giving an example, Wright said companies are now spending five days on paperwork that used to take three hours.

a cup of coffee and a glass of beer on a table: The FDF said hospitality closures mean many firms may not be able to absorb the costs © Getty Images The FDF said hospitality closures mean many firms may not be able to absorb the costs

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He said the government had struck a deal with the European Union too late for food and beverage companies to prepare themselves.

Speaking on port delays, Wright said trading with the European Union will get worse before it gets better.

There are currently around 2,000 lorries per day crossing between Dover and Calais, when there are normally 10,000.

The Cabinet Office said the Brexit deal was "the first free trade agreement the EU has ever reached based on zero tariffs and zero quotas and it is fantastic news for families and businesses in every part of the UK".

A spokesperson continued: "We have always said there would be new rules and processes for businesses to follow after the end of the transition period and are working closely with them to resolve any outstanding issues."

Last week it said that businesses needed to be fully compliant with the new trade rules to avoid disruption.

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