CONSUMERS face supermarket price hikes if the UK Government fails to strike a trade deal with the EU before the end of the Brexit transition period, the sector has warned.

Without an agreement the sector faces £3.1 billion of tariffs on food and drink a year.

EU chiefs are set to move to No-Deal Brexit planning if there is no breakthrough in next week’s last-ditch talks.

Relations between the sides have been tense recently since the UK Government admitted its Internal Market Bill would breach international law by overriding parts of the Withdrawal Agreement signed with the bloc last year.

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However, diplomats have said there is a “rather positive spirit” as they prepare for the make-or-break talks.

Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “The UK and EU must hammer out a final arrangement as soon as possible.

“Coronavirus is already making life hard for consumers, particularly those on lower incomes and, and a No-Deal Brexit will have a massive impact on their ability to afford essential goods. UK consumers have benefitted from great value, quality, and choice of food thanks to our ability to trade tariff free with the EU.

“There is now the risk of a £3bn tax bill for the food we cannot source here in the UK. Unless we negotiate a zero-tariff deal with the EU, the public will face higher prices for their weekly shop.

“This would prevent harm to shoppers, retailers and the wider economy.”

If no deal is agreed, from January 1 85% of foods imported from the EU will face tariffs of more than 5%.

The average tariff on food coming from the EU would be more than 20%.

Meanwhile Ewan MacDonald-Russell, Scottish Retail Consortium’s head of policy, said: “Scottish consumers benefit enormously from tariff-free trade with Europe. With the economy under unprecedented pressure, and consumer spending already suppressed because of coronavirus, any hit to household budgets needs to be avoided.

“It’s essential a pragmatic solution is found to secure lasting zero-tariff trade between the UK and the EU as soon as possible.”