Brexit could see food and drink prices rise in double figures, suppliers warn

By Hannah Thompson contact

- Last updated on GMT

Credit: Lynx Purchasing
Credit: Lynx Purchasing

Related tags: United kingdom

Brexit could lead to a significant climb in food and drink prices of as much as 11 per cent, hospitality companies have warned.

David Read, the chief executive of Prestige Purchasing, suggested that the combined effects of a weakened sterling, import tariffs, and rising labour and energy costs could risk pushing up the price of food and drink by as much as 11 per cent, especially as 27 per cent of the UK’s total food is estimated to be imported from the EU, he said.

The 11 per cent figure came from a recent report from Defra on imported food prices.

Lynx Purchasing has also announced a similar prediction in its Summer 2016 Market Forecast, as it reported a rise in food and drinks prices faced by caterers and other purchasers thanks to the ambiguity surrounding the Brexit debate.

Uncertainty within the City of London and the supply chain could also drive up costs, as could the price and fluctuating availability of labour and potential higher fuel prices between the EU and UK, the forecast said.

Products likely to be hit especially hard include salad produce, European pork, and coffee and bananas, the latter of which are traded in dollars, which will push up prices further as the pound sterling continues to weaken, the report suggested.

Read said: “The scale of price increases are difficult to predict, particularly as global food prices remain generally quite soft currently, but the potential range of increases is wide. Smart caterers will be clear about contingency plans in advance of the vote.”

Tourism price hikes and hospitality debates

The warnings come amid figures suggesting that a Brexit could impact the UK tourism industry by as much as £4.1bn, according to figures from travel deals company Travelzoo.

These suggested that a third of travellers (33 per cent) from Germany, Italy and Spain, and a quarter of those from France, would be less inclined to travel to the UK if the Leave vote wins, and that 10 per cent of travellers from Canada and 12 per cent from the USA would be less likely to come to the UK post-Brexit.

The warnings also come against a backdrop of fierce debate within hospitality over Brexit, with Tim Martin, founder and chairman of pub group JD Wetherspoon, coming out to publicly support the Leave vote, in contrast to Travelodge chief executive Peter Gowers, who has advocated a Remain vote and said that the country needs to “remain open for business”.  

The EU referendum will take place on 23 June. 

Related topics: Business & Legislation

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