Post-Brexit border checks could push up produce prices, warns FPC

The UK government’s post-Brexit border strategy risks further pushing up food prices, according to the Fresh Produce Consortium (FPC).

The industry body that represents 70 per cent of the UK fresh produce supply chain has written to government ministers to share its members’ concerns that they will not be able to absorb the extra cost of charges levied for import checks on goods entering the country from the EU and the rest of the world, due to be introduced in the new year.

Estimated additional annual costs of more than £10m coming from import charges would have to be passed on to consumers, fuelling food inflation just as prices are thought to have peaked, the FPC said.

As reported in the Guardian, the FPC has accused ministers of adopting “an outdated and highly inefficient border solution which fails to meet the needs of a modern progressive industry and simply adds cost for consumers”.

The FPC’s chief executive Nigel Jenney said the current border proposals would add cost, delays and disruption to imports of fresh produce and could lead to gaps on retailers’ shelves, similar to those seen earlier this year.

The FPC’s warning of the impact of the new border proposals on food imports was sent in response to the government’s consultation with industry on its new border strategy, known as the target operating model (TOM).

According to the Guardian, among the proposals made in the draft strategy issued by the Department for Environment, Food and Rural Affairs (Defra) and the Cabinet Office is the introduction of a charge of up to £43 for each consignment from January.

FPC estimates that lorries carry on average 10 consignments, while 1.2m consignments of fresh produce enter the UK each year. As a result, it estimates that the fresh produce industry could face up to £11m in extra costs each year, just as a result of the introduction of a £43 charge on each consignment arriving in the country.

“Businesses that are struggling to keep their spending under control at a time of elevated inflation will have no option other than passing on the new import costs,” said Jenney. “UK border strategy will be directly responsible for UK food inflation.”

FPC is warning that small and medium-sized UK businesses will be hit hardest by the planned import charges, while smaller producers overseas may decide to avoid the administrative burden and ditch exporting to Britain altogether.

According to the Guardian, the Cabinet Office previously estimated that the government’s proposed lighter-touch border regime, without the requirement for certificates or physical checks on low-risk goods entering the country, would help to save UK importers about £400m annually when compared with the previously proposed border model, a figure disputed by FPC.

The final border strategy is expected to be released in the coming weeks, the Guardian said.