British households have spent an extra £7bn since Brexit to cover the costs of importing EU goods such as cheese and meat, according to new London School of Economics research.
The trade impact of leaving the EU has pushed food import prices up, researchers found, resulting in an increase of £250 in household bills since December 2019.
The cost of food in the UK jumped by 25% since 2019, with the post-Brexit trade burden a significant contributor. The university’s calculations showed that, without the added red tape, that figure could have sat at 17%.
Between January 2022 and March 2023 alone, the price of food products more exposed to Brexit red tape – such as cheese and meat – increased by 3.5 percentage points more than those that were not.
“The cost of Brexit to each household now stands at £250 when only considering the impacts on food since December 2019,” the report said. “This aggregates up to £6.95bn overall for UK households.”
Researchers added that the price increases of products more exposed to Brexit were “not correlated” with other economic macro events such as Covid-19 lockdowns or the Ukraine conflict.
“The fact that the results are driven entirely by products with high NTBs [non-tariff barriers] imported from the EU offers strong evidence that Brexit is the driving force behind these effects.”
Traders have been absorbing Brexit-related costs such as veterinary checks on livestock and extra paperwork since the UK left the bloc, which many in the industry have warned has contributed to mounting food inflation.
The UK already has some of the highest food inflation levels in the west. According to the latest figures from the Office for National Statistics, food inflation in April stood at 19% compared with last year.
There are also fears that pending trade costs linked to the roll out of the Border Target Operating Model – a new system of border checks for imported goods set to go live later this year – will inevitably be pushed through the supply chain to consumers.
The UK still heavily relies on EU food imports – according to the FDF, more than two thirds (69.2%) of all food & drink imports in 2022 came from the EU, representing £39.7bn.
Meanwhile, EU buyers have been increasingly put off from importing British fruit due to post-Brexit stringent customs requirements and port delays, chartered accountancy firm Hazlewoods said.
Recent figures released by HMRC showed the value of UK fruit exports have declined by 54% in the past two years, from £248.5m in the year to 31 March 2021 to £113.8m in the same period in 2023.
The main slump happened over the first year, after the UK’s official departure from the EU. Export sales in 2022 have shrunk by a further 4% in 2022.
“Long delays at UK ports are dissuading many fruit farmers from sending their produce abroad,” said Rebecca Copping, partner at Hazlewoods.
“For a nation with an historic reputation for producing high-quality fruit, it’s a shame that red tape is making it harder for farmers to export their wares.
“Even double-digit inflation hasn’t been enough to bring the value of fruit exports into the black. This shows just how much damage has been inflicted on the sector.”