UK retailers see Brexit hit to consumers without detailed customs plans

FILE PHOTO - A shopper checks her shopping list in a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall/File Photo (Reuters)

LONDON (Reuters) - British shoppers could face higher prices and less choice unless Britain and the European Union can agree how to handle thorny issues like haulage and food safety after Brexit, an industry body said on Wednesday. While Britain's government has already outlined its broad vision for a future customs agreement with the EU, the British Retail Consortium said it was still waiting for crucial details around the trade of consumer goods. It called for significant investment in ports and transport infrastructure so new systems are ready when Brexit takes place in March 2019, as well as agreements to prevent goods being held up at the border because of extra checks. "Whilst the government has acknowledged the need to avoid a cliff-edge after Brexit day, a customs union in itself won't solve the problem of delays at ports," said BRC chief executive Helen Dickinson. "So to ensure supply chains are not disrupted and goods continue to reach the shelves, agreements on security, transit, haulage, drivers, (sales taxes) and other checks will be required to get systems ready for March 2019." The BRC's report is the latest in a string of appeals from industry groups for more clarity about how trade and immigration will operate in practice after Brexit. Nearly half of businesses operating in Britain's food supply chain say European Union workers are thinking about leaving because of uncertainty around Brexit, according to a survey last week conducted by several trade bodies. Earlier this month Britain outlined two possible approaches to a new customs relationship with the EU after leaving the bloc and its customs union. It described a "highly streamlined customs arrangement" that would borrow from existing systems while expanding the use of technology, or a new customs partnership that could mirror the EU's requirements for imports from the rest of the world. The proposals were dismissed as "fantasy" by one senior EU official. Separately, the BRC reported British shop prices fell 0.3 percent in August compared with a year ago, following a contraction of 0.4 percent in July, pointing to a growing financial squeeze on British households. Prices for non-food goods declined at the slowest rate since April 2013. "The reality is that with protection from hedging policies coming to an end, non-food retailers are running out of options for protecting shoppers from the significant increases in the price of imported goods since the EU referendum in June last year," Dickinson from the BRC said. "We expect non-food prices to continue trending towards year on year inflation." (Reporting by Andy Bruce; Editing by Hugh Lawson)