Food prices are taking centre stage in the cost-of-living crisis, placing significant pressure on household budgets even as overall inflation eases.
With latest Office for National Statistics figures showing food CPI (Consumer Prices Index) inflation at 19.3 per cent – down only slightly on March’s 19.6 per cent – consumers continue to face budget-breaking price rises on kitchen cupboard essentials such as olive oil, up 49 per cent on a year ago, cheese, now 42 per cent more expensive, and milk and backed beans, both up 39 per cent.
According to research from the London School of Economics and other universities, Britain’s departure from the European Union has accounted for about a third of the increase in food bills for households since 2019.
Although London and Brussels have an agreement allowing largely tariff-free trade in goods, barriers to exports and imports in the form of paperwork, known as non-tariff barriers, have caused delays and higher costs.
And it could be about to get worse.
“Not for EU” labelling on British food products sold across the UK will be phased in gradually from this autumn, Foreign Secretary James Cleverly has said.
Cleverly told peers that during negotiations with retailers ahead of the signing of the Windsor Framework, UK-wide labelling was identified as the preferred option.
The Centre for Economic Performance (CEP) study compared price changes for food products imported from the European Union with prices of food from further afield.
Before Brexit these products had similar price trends but after Brexit, there was a relative increase for products more exposed to imports from the EU, it said, and that has continued into 2023.
The study found that between January 2022 and March 2023, the price of food products that were exposed to Brexit increased by approximately 3.5 percentage points more than those that were not.
When considering the impact on food prices since December 2019, just before Britain formally left the EU, they estimated the cost of Brexit to UK households at £6.95 billion ($8.77 billion), or £250 per household.
Between December 2019 and March 2023, it said UK food prices rose by almost 25 percentage points.
“Our analysis suggests that, in the absence of Brexit, this figure would be 8 percentage points (30 per cent) lower,” the CEP said.
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