cost hike Price of Irish white sliced pan and pizza to rise due to Brexit tariffs

It is feared pleas from the Government for an exemption from the rules will fall on deaf ears in Brussels.

Bread prices could rise by 9pc

Sarah Collins

March 06 2021 06:00 AM

IRISH white sliced pan, pizza dough and wholemeal bread all face price hikes because of Brexit-related tariffs.

It is feared pleas from the Government for an exemption from the rules will fall on deaf ears in Brussels.

Although the EU agreed a trade deal with the UK in December, a particular blend of UK flour used by Irish bakers has been caught in the tariff net.

Tánaiste Leo Varadkar recently wrote to EU vice-president and trade chief Valdis Dombrovskis asking him to "consider any flexibilities that can be applied".

A Commission spokesperson said this week that they were "looking into the matter, as it is technically complex".

However, the bloc has said previously that it does not grant opt-outs from trade rules.

The EU fears it would set a precedent and open a back door to its market for UK products. The British government's unilateral decision this week to extend grace periods for food and parcels bound for Northern Ireland has made Ireland's request even more difficult.

The Brexit small-print caught many businesses and Government officials unaware when the trade deal came into effect on January 1.

Food Drink Ireland, an Ibec group, has warned about price rises and called for an opt-out for the Irish bakery sector.

It estimates tariffs will push up production costs by 50pc and force bread prices up by 9pc, making Irish products more expensive than those produced in the UK or the EU.

Ireland imports around 90pc of its flour from the UK, according to Bord Bia. But some of that flour contains 45pc Canadian wheat.

And complex 'rules of origin' limits allow for a maximum of 15pc grain from outside the EU or UK. Any amount above that threshold incurs a tariff of €172 per tonne.

"Supermarkets may say, 'we're not increasing prices'. That's when the bakers will have to suck it up," said Edgar Morgenroth, professor of economics at Dublin City University's Business School. But he said Irish bakers can find alternative suppliers within the EU.

Enterprise Ireland has been working with Irish companies to help them source different suppliers, but it takes time.

Canadian wheat is what gives Irish products their distinctive taste, said Alex Waugh, of UK Flour Millers.

"We're a bit stuck," said Mr Waugh. "Nobody eats sliced pan in mainland Europe. In general, the millers have no experience of the flour to make that kind of bread."