Food inflation has fallen within the past year, with it reaching 5% in February following a high of almost 20% in March of last year. However, the introduction of post-Brexit border checks which has been delayed several times over fears they could fuel inflation, have begun to be introduced from the start of this year. Food suppliers have warned that these post-Brexit border checks will have an impact on food inflation, with a new charge being introduced at the end of the month on food being imported.
The post-Brexit border charge on imported food will vary from a fee of £10-£29 depending on the products which are being imported, and the overall cap for mixed loads will be £145. The charge will apply to foods, such as cheese, salami, and fish which are coming through the port of Dover or the Eurotunnel from April 30th. About a quarter of the UK’s food imports pass through Dover and the Channel Tunnel. The fee is intended to cover the cost of operating the border control posts introduced after Brexit, and will not apply to goods brought into the UK for personal use.
Importers of food have warned that the new charges applied could lead to higher prices for consumers within the United Kingdom. Chief Executive at The Cold Chain Federation has said “Ultimately, this will increase business costs and food prices and potentially lower choices for the shopper.” It is also suggested that this added fee will be passed on to either the UK importer, the smaller UK retailer, or the UK Consumer.
The resulting inflation on costs of food is likely to increase costs for businesses, which can lead to higher prices for consumers. This can make it difficult for businesses to compete and can lead to lower profits. In particular, small business are likely to feel the impact of reduced customer spending.
For businesses which are facing the potential increase in costs and spending, there are certain protections which they may rely on. For example, ensuring that a robust set of terms and conditions along with appropriate, relevant clauses are in place. We have previously covered some useful terms for businesses to consider, read more on price increase clauses HERE
A Spokesperson for the Government has addressed the concerns raised by businesses and said that the charge is designed to recover the costs of operating world-class border facilities which protect the supply of food, farmers and the environment against costly disease outbreaks entering the UK. Moreover, it is suggested that the charges follow extensive consultation with industry and a cap has been set specifically to help smaller businesses.
The Commercial & IP Team at Berry Smith can provide specialist advice on this issue, as well as general commercial and business advice. Please contact us if you would like more information about the issues raised in this article or any other aspect of Commercial law at 029 2034 5511 or commercial@berrysmith.com .