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A ‘big increase’ in the cost of flour to affect Irish shoppers

A ‘big increase’ in the cost of flour to affect Irish shoppers

A ‘big increase’ in the cost of flour to affect Irish shoppers

Consumers face a possible 9pc increase in the price of bread, Food and Drink Ireland (FDI) has warned.

The fallout from Brexit will result in tariffs being applied to flour imports and lead to increased costs for the bakery sector, according to the lobby group, which is part of Ibec.

FDI director Paul Kelly said: "Under the Rules of Origin in the TCA [Trade and Cooperation Agreement], there is a requirement that the wheat used should be of UK or EU origin, with a maximum tolerance of 15pc for grain from other countries such as Canada or USA."

If the wheat used to make flour is more than 15pc of third country origin, the full tariff of €172 per tonne becomes payable.

Millers

Mr Kelly said this is "a significant problem" for the bakery industry, which buys flour from millers in Britain with a high proportion of third country wheat, mainly from Canada or the US.

If the full tariff of €172 per tonne were to be applied to flour imported from Britain, it would mean a 50pc increase in product costs, FDI warned.

Based on ERSI projections, which also looked at other non-tariff barriers, this would equate to a 9pc increase in bread for consumers.

The tariffs will have a "significant" impact on the competitiveness of Irish-based producers both on their domestic and export markets, FDI added.

It has called for an exemption for the bakery sector in order to avoid these tariffs.

It said at this point it is hard to know how many companies could be affected and any price increases would be a matter for individual businesses.

Michael McCambridge, of McCambridge Bread, said his business will not be affected as it uses a different type of flour, with a lower protein, to other bakeries. Also, the flour it uses is milled in Ireland.

David Hickey, of Daly Foods, sees a "big increase" coming in the price of flour, but said this is due to the "aggressive" rise in the price of wheat, which was happening before Brexit.


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