This week, the UK government released new proposals aimed at imposing a fixed inspection fee of up to £43 on every shipment of food from the European Union. The plans follow the EU-UK trade agreement signed this January, as it was decided not to conduct full border checks on food imports until October. However, this new fee comes at a difficult time when many households are struggling with current food price inflation, which hit a 45-year record of 19.2% in March, while decreasing in several European countries.
Industry bodies have been quick to voice their concerns, arguing that smaller businesses will be hit the hardest. The proposed fee will undoubtedly impact current price pressures, which industry leaders are describing as “extremely concerning”. Nicola Malone, the head of trade at Logistics UK, notes that the proposed fee is “very high”, and believes that it could lead to market distortion in the movement of commodities, thereby increasing inflationary pressures.
Shane Brennan, director of the Cold Chain Association, echoes similar concerns and states that the proposals “do not make sense” at a time when the UK government is actively discussing imposing price controls on UK supermarkets to bring down the cost of staple foods. He argues that the government wanting to approve a new multimillion-dollar import tax on EU food imports while holding a Downing Street crisis meeting to discuss out-of-control food inflation is “insane”.
A report by the London School of Economics shows that the impact of Brexit on food prices has cost each household £250 since December 2019, which amounts to £6.95bn for the entire UK. As it stands, the European Union is responsible for supplying approximately 28% of the food consumed in the UK.
The proposed new fees will certainly have a significant impact on the food industry, particularly smaller businesses. With current food price inflation, many will struggle to absorb this additional cost. The proposal appears to add further momentum to concerns about government policies and their impact on the UK’s food supply chain.
