Retailers expected to source more British food post-Brexit

New research from a retail specialist has suggested that supermarkets that have cultivated good relations with British farms will do the best in the immediate aftermath of the UK’s exit from the EU.

The new report from Kantar Retail has found that the price of fresh produce was likely to go up, at least in the short-term, when the UK leaves the EU within the next few years.

It believes that those supermarkets with headquarters in the UK, such as Tesco, Sainsbury’s and Morrisons, would find their ability to import goods from the EU hit by a weaker sterling/euro exchange rate.

This may force many to look at the domestic market to source produce for their shelves. As an example it has shown that Tesco sources around 50 per cent of butter and cheese from milk sourced from EU member states.

Despite being based outside the UK, the report said discounters like Aldi and Lidl could still be well-placed to absorb the rise in food prices.

“Crucially, in their attempts to position themselves as genuine weekly shopping destinations, both Aldi and Lidl have drastically increased and improved their fresh offer, with sales from fruit and vegetable, meat, poultry and bread now accounting for 50 per cent of sale,” the report said.

“In this time, they have been the most proactive in driving provenance and localism, with Aldi implementing a 100 per cent British fresh meat policy. This heightened relationship with British farmers means they are in a stronger position than their rivals in the immediate term.”

This research may suggest that British farmers may see an increase in domestic demand for their produce, as prices for produce from the rest of Europe increase as tariffs are imposed on imports.

However, the analysis fails to point out that this is only one possible outcome. Much is unknown about the future of food prices post-Brexit and while domestic demand might increase farmers exporting grains, livestock and other agricultural products to the EU may find they are no longer competitive with rivals on the Continent.