There is no evidence that the Northern Ireland Protocol has led to increased food prices so far
Across a range of foods grocery prices in Northern Ireland are lower than equivalent prices in Great Britain
Since the end of the Brexit transition period at the end of 2020, many residents of Northern Ireland will have experienced issues when attempting to order goods from Great Britain. I have certainly seen the dreaded words “Sorry, this item can't be shipped to your selected address” more than once when browsing Amazon UK. It is still a novelty seeing electronics shipped from England to Northern Ireland accompanied with a customs declaration.
Sam McBride’s article in the News Letter gave an example of the sort of difficulties encountered when attempting to source goods from Great Britain. Brexit and and the Northern Ireland Protocol have added frictions and costs to trade across the Irish Sea that didn’t exist previously.
In the article there was an interesting discussion on the matter of grocery prices in Northern Ireland, something that is of obvious importance to everyone who lives here.
Since the start of 2021, Sainsbury’s have started stocking goods on their shelves from rival supermarket Spar.
In many cases, these items are more expensive than the Sainsbury’s own-brand equivalent products, which are now no longer available in Northern Ireland. One example given was that of a kilo of broccoli. The Spar product sold by Sainsbury’s costs £2.18, which is 36.2% more expensive than the own-brand equivalent of £1.60.
Several examples of goods were cited that are now more expensive in Northern Ireland as Sainsbury’s only stock the Spar product and not their own-brand product.
However, when viewed across multiple products and retailers, there is no evidence that groceries are more expensive for consumers in Northern Ireland compared with Great Britain. In fact, for many products average prices in Northern Ireland are less than the equivalents in England, Scotland and Wales.
Every month, the Office for National Statistics release a dataset containing individual product prices across various retailers and UK regions. This allows comparisons to be made on typical between regions over time. This data ultimately feeds in to the calculations that derive the official inflation rate.
Using January 2020 as the basis month, I compiled charts showing how grocery prices have changed since then in both Northern Ireland and Great Britain1.
Firstly, this is the chart of normalized dairy prices since January 2020. The solid lines represent the movement of prices in Great Britain, and the dashed lines represent the equivalent movements in Northern Ireland.
A basket containing equal values of butter, milk, Parmesan cheese, soft continental cheese and cheddar cost 2% less in Great Britain in May 2021 compared with January 2020, and 13% less in Northern Ireland. The average price of a kilo of Parmesan cheese in Northern Ireland has fallen from £27.08 in January 2020 to £17.44 in May 2021. Average Parmesan prices in GB have been stable, having fluctuated between £18.63 and £20.63 per kilo.
The average price of 2 pints of milk has risen fractionally from 99p to £1.00 in Northern Ireland, whilst in Great Britain 2 pints of milk has remained constant at 84p.
For meat and fish, prices have followed a broadly similar trajectory.
The price of a kilo of sausages has remained unchanged at £4.98 in Northern Ireland, compared with a 5% increase to £5.37 in Great Britain.
Overall, a basket with equal values of these five meat and fish products was 2% cheaper on average in Great Britain in May 2021 compared to January 2020, whilst in Northern Ireland the basket was 8% cheaper.
For bakery goods, a basket containing a white unsliced loaf, a doughnut, a white sliced loaf, a sponge cake and a wholemeal unsliced loaf cost £5.61 on average in GB (an average 2% decrease since January 2019). In Northern Ireland the equivalent goods typically cost £4.57, an average reduction of 9% over the period across the products.
Vegetables have seen significant price falls in Northern Ireland since the start 2020 compared with Great Britain. In Northern Ireland, a basket containing a kilo of carrots, broccoli, mushrooms, onions and baking potatoes cost, on average, £6.65 in May 2021. This is 23% less on average than they would have cost in January 2020 (£8.45). In Great Britain the equivalent goods cost £7.83 in May 2021, an average reduction of 2% from January 2020.
Broccoli was cited as an example of an item that is more expensive in Sainsbury’s in Northern Ireland than in Great Britain. The £2.18 cited in the article is indeed present in the ONS dataset. However, from the data you can see that other Northern Ireland retailers charged £1.39 and £1.31 for the same product. From the dataset, a kilo of broccoli cost £1.52 on average in Northern Ireland, compared with £2.11 in Great Britain.
A basket of a kilo of cooking apples, bananas and grapes, and an orange and a pineapple cost £7.01 on average in Northern Ireland in May 2021, 10% less on average than the same goods in January 2020. The same goods cost £7.90 on average in Great Britain, a reduction of 5% from January 2020.
Alcohol prices have been broadly static since January 2020, with a basket of lager, vodka, whisk(e)y, white wine and red wine costing 2% more in May 2021 compared with January 2020 in Northern Ireland, and 1% less in Great Britain. The average bottle of new world white wine cost £6.85 on average in both NI and GB, whilst a European bottle of red wine was £6.55 on average in Northern Ireland and £7.15 across the Irish Sea.
For frozen food, a basket of chicken nuggets, beef burgers, fish fingers and peas cost £10.05 on average in Great Britain in May 2021, compared with £8.89 in Northern Ireland. This represents a 6% average increase on January 2020 prices in Great Britain, and 12% average fall in prices in Northern Ireland.
In total, the May 2021 basket prices in Great Britain were:
Dairy £38.42
Meat and Fish £41.67
Bakery £5.61
Vegetables £7.83
Fruit £7.90
Alcohol £54.99
Frozen £10.05
Total £166.46
Whereas in Northern Ireland the same goods would have cost, on average:
Dairy £36.23
Meat and Fish £37.66
Bakery £4.57
Vegetables £6.65
Fruit £7.01
Alcohol £61.80
Frozen £8.89
Total £162.80
The same basket in GB would have cost £168.59 in January 2020, and the same basket in Northern Ireland in January 2020 would have cost £179.65.
Excluding alcohol, each category of groceries was cheaper on average in Northern Ireland than Great Britain. The average fall in prices across all the food analyzed was 12.5% in Northern Ireland, and 1.2% in Great Britain.
It is absolutely correct that Brexit and the Northern Ireland Protocol have introduced frictions and costs to trade across the Irish Sea, which will ultimately be borne by consumers in higher prices or a reduction in choice.
The mitigations put in place to protect trade between Great Britain and Northern Ireland have been the subject of significant political arguments between the UK and the EU. There is clearly a high level of uncertainty about the challenges facing retailers in Northern Ireland regarding the administrative burden caused by Brexit and the Protocol.
Despite this, there is little evidence that household groceries have become more expensive since the start of 2021. In fact, across several foods prices in Northern Ireland are lower than their equivalents in Great Britain, and for some foods prices have fallen dramatically over the last 18 months.
It is certainly possible that barriers to trade across the Irish Sea could result in higher food prices for Northern Ireland consumers in future. But they haven’t materialized yet.
I used price quotes with a validity code of 3 or 4, and calculated average prices by calculating the sum of the stratum weights multiplied by the price quotes for each product for Great Britain and Northern Ireland, and then dividing this value by the sum of the stratum weights.