Post-Brexit red tape is already raising the prices of fruit, vegetables and plants at London's historic New Covent Garden Market by up to 10%.
Traders and a top restaurateur warned today that Londoners will register the impact on their plates and in their wallets once hospitality fully reopens and chefs have to pivot towards cheaper produce, while putting up prices.
The Standard has learned that every palette of plants imported to the market from Europe will now cost consumers 10% more, with a 3% to 5% increase in the cost of a palette of fresh fruit or vegetables.
Greengrocer Nature’s Choice has been based at New Covent Garden for 19 years, and supplies chefs including Gordon Ramsay and the team at two Michelin star-Le Gavroche.
Commercial director Vernon Mascarenhas said the costs increase is a result of companies having to fill in new post-Brexit forms through HMRC-appointed brokers since January 1.
There is likely to be “at least a 5% increase in prices on menus across the board
“We have to go through the broker to get the paperwork done, and the broker charges per invoice. That is where the price increase has come from," he said. “We have no option, we cannot do it in house to bring those costs down. Fruit and veg is a very tight margin business anyway, so yes companies are passing it [costs] on.
“It will be noticed when someone is buying a box of artichokes from Italy and it costs £25 not £21.
“The chefs are going to start to lay off on the more luxurious ingredients, like truffle, and go for a lot more of the less expensive ingredients, because they are going to have to keep the costs of their dishes down. It doesn’t matter if you’re a 3* Michelin restaurant or a pub around the corner, there is a price bracket that you have to work to."
David Moore, owner of Fitzrovia's Pied à Terre, said that he is already seeing vegetable prices up by 20% on last year. He said that these price rises, combined with the looming loss of VAT relief for hospitality post-March 31, means that there is likely to be “at least a 5% increase in prices on menus across the board” when London hospitality finally fully reopens.
“We’ll have to be working clever," he said. “Chefs will move towards better value vegetables… A turnip is about a quarter of the price of a celeriac. The clever chefs will probably have a combination of a small increase in price, a pivot towards different, better value vegetables, and a sprinkling of the luxury ingredient.”
It came as news emerged that thousands of British online shoppers are being hit by new and unexpected customs, VAT and delivery charges on orders from the EU, as retailers based on the continent also face the reality of the new red tape.
Customers are facing demands to pay up to 33% more for items placed in bonded warehouses on arrival in the UK, The Times reported.
A government spokesman the “new VAT model ensures ... that UK businesses are not disadvantaged by competition from VAT-free imports” and that “many EU businesses will have already registered for UK VAT under existing rules and HMRC is working very closely with those who haven't to ensure they can comply with the changes."
The Standard has contacted the Government for comment.