Quarterly UK Retail Brexit Trade Review

A report by Squire Patton Boggs looking at the impact of Brexit on the retail sector

New research suggests that no deal could add £7.8 Billion to the cost of retail goods - March 2018

The findings were covered by a number of leading national and sector publications including The Times, Independent and Retail Week, you may have seen the headline '£7.8 billion could be added to the cost of retail goods if the UK fails to agree a deal with the EU'.

The report looks at the impact of Brexit on the retail sector but also looks to provide analysis on the UK's other key trading partners and looks at 8 core sub areas of retail including food and drink.

Key findings included a number of things specific to the food and drink sector, in particular:

  • The risk of higher costs from new tariffs is greatest for food and drink from the EU. Firstly, the exposure of the UK market to imports from the EU is the highest compared with any other retail sector, with more than 70% of UK food and drink imports originating from within the EU.
  • The standard rate of tariffs that would apply to imports of EU food and drink is far higher than the rate for non-food goods, with duties for some meat and dairy products rising to 80%.
  • To continue tariff-free trade in food and drink post Brexit, the EU is likely to demand compliance with a wide range of non-trade regulations, which may be difficult for the UK to accept.
  • Potential alternative non-EU sources of food and drink are limited by either high tariffs and/or non- tariff barriers.
  • Any new immigration system for EU citizens would need provision for non-graduate labour to ensure that the UK retail industry has access to the workers it needs or we could see a rise in labour costs due to competition within the industry and its supply chain.

The review is part of a wider UK Retail Brexit Trade Service that we have partnered on, with leading sector consultancy Retail Economics. The wider service will also provide a series of monthly pulse updates and policy roundtables.

Last reviewed: 18 Apr 2018