Brexit: Consumers won't 'feel food price rises' Tesco boss says

Suban Abdulla
Shoppers wearing protective face coverings to combat the spread of the coronavirus, choose items in a Tesco supermarket in London on December 14, 2020. - With just over two weeks to go until Britain leaves the EU single market, preparations have been stepped up as fears grow about the impact of customs checks and congested ports. Concern is rising over the supply of perishable fresh fruit and vegetables, much of which is imported from EU countries. (Photo by DANIEL LEAL-OLIVAS / AFP) (Photo by DANIEL LEAL-OLIVAS/AFP via Getty Images)
Shoppers in a Tesco supermarket in London on 14 December. Photo: Daniel Leal-Olivas / AFP via Getty Images

UK consumers won’t feel Brexit-related food price rises, the chairman of supermarket Tesco (TSCO.L) has said.

John Allan told the BBC that any changes to food prices post-Brexit are likely to be "very modest indeed" under the agreement between the UK and the European Union.

The supermarket boss hailed the deal, saying that it is a "good outcome" and far better than a no-deal scenario.

Allan warned that food prices could rise between 3% and 5%, last month, amid reports of a no-deal Brexit.

“The tariffs were the things that were going to generate the price increases," Allan said. He added: "There'll be a little bit more administration associated with importing and exporting. But in absolute terms, I think that will hardly be felt in terms of the prices the consumers are paying."

The prices of many imported food items could have risen significantly in the absence of a deal, including brie cheese could have risen by up to 40%.

On Christmas Eve, prime minister Boris Johnson said the deal ensures "tariff-free" trade between the UK and its biggest trading partner, the EU.

Johnson called the agreement a “jumbo Canada-style” deal that would preserve £660bn ($895bn) of cross-border trade while allowing Britain to strike deals elsewhere, set its own rules and catch more fish in UK waters.

MPs are due to vote on the nearly 1.250 page deal in the House of Commons on Wednesday 30 December.

READ MORE: UK food prices may rise post-Brexit amid government plans to restrict EU workers

It comes after ministers on the Environment, Food and Rural Affairs (EFRA) committee called on the UK government to intervene to prevent Brexit driving food prices up as foreign workers leave Britain.

EU nationals account for the majority of workers in key sectors including meat processing and picking crops, the EFRA’s report said.

Freedom of movement — which allows EU nationals to enter and leave a country for work and other purposes without a visa — will come to an end in the UK as it exits the EU on 31 December.

After the transition period on 31 December, visas will be issued under a pilot scheme for seasonal agricultural workers.

EFRA’s report urges ministers to immediately confirm the number of visas that will be issued next year under the Seasonal Workers Pilot, so farmers know whether or not they will have the staff needed to harvest their crops.

With COVID-19 and the end of the Brexit transition period, MPs said the cap should be high enough to ensure farmers will not struggle to recruit staff.

The number of foreign workers allowed in the UK to pick fruit and vegetables, will treble amid fears over rotting harvests. An expected 30,000 temporary staff will be given permits in 2021, up from 10,000 in 2020.

Watch: 10 ways to Brexit proof your finances