Brexit Fears Cause UK Food Prices to Skyrocket
The food market is violently reacting to a possible British exit and food and drink prices are escalating, according to a recent report by Lynx Purchasing.
Photo via Flickr user snowcrash
For a nation that will be forced to import more than half of its food supply within a generation, Britain's relations to surrounding nations and their farmers is more than vital—it's pretty much the only thing keeping the UK from imploding in the most spectacular of ways.
"Brexit," the popular term for Britain's proposed exit from the European Union, will be the subject of an upcoming vote by the British electorate on June 23. A recent poll shows that a divide on this issue—largely generational—has taken over Britain: While most young people want Britain to remain in the EU, two out of three older Brits want out.
Countless British farmers, chefs, and restaurateurs have voiced their support for or opposition to Brexit, but the issue has so far stayed largely in the speculative realm. Now that the vote is mere weeks away, though, the food market is violently reacting to a possible British exit and food and drink prices are escalating, according to a recent report by Lynx Purchasing, a buying specialist.
The possibility of Brexit becoming a reality is having a multifarious destabilizing effect. The value of British pound has dropped against both the euro and the US dollar, which has caused the price of fresh produce to rise and unsettle the markets. Lynx Purchasing managing director Rachel Dobson says the markets "thrive on certainty… there's no doubt that the extended debate before the referendum is having an impact."
According to the report, much of Britain's summer food, including salad produce, is imported, and the currency drop has already put pressure on consumers. Prices of avocados, pork, meat cuts used for barbecue, coffee, and bananas are all up. Compound this with rising labor costs thanks to a new law called the National Living Wage, which was enacted in April, and you've got a potential shitstorm on the horizon.
One positive: low inflation. Dobson says, "We are fortunate to the extent that these price increases are coming at the end of a very benign period for inflation. Prices are building back up again from a low base, which gives operators time to plan. However, we expect a return to inflation later in the year regardless of the outcome of the referendum, and we advise all operators to look carefully at their costs."
Whether you are for or against a Brexit, it's hard to ignore the havoc the debate is already causing to Britain's food supply.