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Brexit deal reached but costs still on the rise

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AHDB analysis estimates these costs range from 5% to 8% for livestock products are likely to be reflected in farmgate prices.

Posted on Dec 28 ,11:09

Brexit deal reached but costs still on the rise

Food prices, especially for meat products, are expected to increase in the UK, even with a Brexit deal secured in the last moment. Some 60% of the UK's food, feed and drink exports in 2019 headed to the EU, while the import ratio was about 70% for those goods. However, even with a deal secured between the parts at the very last moment, commercial relationships between the UK and the EU are expected to add new costs for exporters. "Although reaching a trade deal with the EU means that the eye-watering tariff for many food products between EU and UK will be avoided, changes to that close relationship still means increasing costs and complexities due to the fact that the UK will be leaving the single market and trading with the EU as a third country. This trade friction, in the form of additional paperwork, physical checks and labelling requirements will squeeze the already tight margins within the supply chain," commented David Swales, Head of Strategic Insight at the Agricultural and Horticultural Development Board (AHDB). The latest analysis released by AHDB estimates these costs range from 5% to 8% for livestock products and 2% to 5% for crops, which are likely be reflected in farmgate prices, i.e. the farmers are likely to bear the brunt of these additional costs. These estimates do not include the cost of potential delays at port, which may result in a further loss of value of perishable loads.

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