UK retailers see Brexit hit to consumers without detailed customs plans

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On Wednesday, an industry body said that shoppers in Britain could suffer higher prices and fewer choices unless the European Union and Britain can agree on how to handle issues like food safety and haulage after Brexit.

Although the government of Britain has already drafted its vision for a customs agreement with the European Union in the future, the British Retail Consortium announced that it was still waiting for crucial details around the consumer goods’ trade.

It urged for significant investment in ports and transport infrastructure, so new systems are ready by March 2019 when Brexit takes place, as well as arrangements to prevent goods being held up at the border caused by extra checks.

“Whilst the government has acknowledged the need to avoid a cliff-edge after Brexit day, a customs union in itself won’t solve the problem of delays at ports,” stated Helen Dickinson, BRC chief executive.

“So to ensure supply chains are not disrupted and goods continue to reach the shelves, agreements on security, transit, haulage, drivers, (sales taxes) and other checks will be required to get systems ready for March 2019.”

The report of the BRC is the newest in a series of appeals from industry groups for more certainty about how trade and immigration will operate after Brexit.

According to a survey conducted last week by several trade bodies, almost half of businesses operating in the food supply chain of Britain say that workers of the European Union are contemplating about leaving because of uncertainty around Brexit.

Britain explained two possible approaches to a new customs relationship with the European Union after leaving the bloc and its customs union, earlier this month.

A “highly streamlined customs arrangement” that would adapt existing systems while expanding the use of technology or a new customs partnership that could mirror the EU’s requirements for imports from the rest of the world was described.

However, a senior EU official has dismissed the proposals as “fantasy.”

In a separate report, the BRC reported that prices of British shops fell by 0.3 percent in August compared with that of 2016, following a decrease of 0.4 percent in July, leading to a growing financial squeeze on British households.

On the other hand, the prices for non-food goods fell at the slowest rate since April 2013.

“The reality is that with protection from hedging policies coming to an end, non-food retailers are running out of options for protecting shoppers from the significant increases in the price of imported goods since the EU referendum in June last year,” stated Dickinson from the BRC.

“We expect non-food prices to continue trending towards year on year inflation.”