As UK inflation rises in response to the Middle East conflict, food and drink industry figures have come forward to question how impactful the upcoming UK-EU sanitary and phytosanitary (SPS) agreement will be on food prices.
Elsewhere, the benefits of the US/Israel-Iran war to Russia’s economy appear to be limited. Despite Moscow’s initial hopes that higher oil prices would be beneficial, this has proven not to be the case and a worsening economy has led to an opposition leader taking a strong line of criticism against the country’s leadership.
Food costs to fall after EU ‘reset’?
Voices from industry have warned the public not to get their hopes up about the impact of the upcoming UK-EU ‘reset’ agreement on food prices.
Andrew Opie, director of food and sustainability at the British Retail Consortium, said that while he was in favour of the agreement, the impact on price would be “negligible”.
“In proportion to things like energy costs, labour costs or regulatory costs”, the impact of removing sanitary and phytosanitary (SPS) checks and documentary requirements “are a very small cost,” said Opie.
Nigel Jenney, CEO of the Fresh Produce Consortium, also warned that government claims about removing post-Brexit regulations to lower food prices are overblown.
“The government is making headline statements that are at best erroneous, if not blatantly untrue,” Jenney told Politico.
Jenney explained that government rhetoric about the benefits of the planned SPS agreement within the reset frequently included reference to fresh produce, but checks on fruit and vegetables were suspended last year.
Meat, dairy and other plant-based goods are more commonly subject to scrutiny and additional administrative requirements at the border, under the Border Target Operating Model, introduced in 2024.
‘Economic self-harm’
Jenney’s comments follow an open letter published last month (23 March) in which he claimed the reset could lead to greater SPS trade disruption and negative economic consequences.
He claimed that UK is now moving towards a “politically driven model” that constitutes “alignment for alignment’s sake”, adding that the EU rules the UK is set to adopt will impose “unnecessarily stringent” third-country controls on UK imports from ‘Rest of World’ countries.
Jenney characterised this as a “serious act of economic self-harm”, paving the way for more paperwork, inspections and border delays.
Government stance
As UK-EU negotiations progress towards an SPS agreement as part of the relations ‘reset’, the UK government has said that lower costs are one benefit that consumers and businesses can anticipate.
UK prime minister Sir Keir Starmer has linked the agreement to lower prices, telling the BBC last week that a reduction in requirements for businesses will “of course, translate into lower prices”.
This rhetoric has become more pronounced in light of the inflationary impact of the Iran war.
In March, a Department for Environment, Food and Rural Affairs notice said that the agreement “will make it easier, cheaper and more predictable for goods to move not just between the UK and the EU, but also within the UK itself”, referencing also the Windsor Framework.
Russian economic challenges
Despite the Iran war leading to an easing of sanctions on Russian oil, stoking fears that the conflict could help fund Russia’s war in Ukraine, the country’s economy appears to be faltering.
Poor economic data led to unusually explicit criticism of President Vladimir Putin by the leader of a parliamentary opposition party, Reuters reports.
Gennady Zyuganov, the leader of Russia’s Communist party in the Russian parliament, went so far as to suggest yesterday (22 April) that if major economic changes aren’t delivered, the country could be heading towards another revolution.
“If you (the government) do not urgently adopt financial, economic and other measures,” he told officials during a plenary session Russia’s State Duma “by autumn a repeat of what happened in 1917 awaits us. We don't have the right to repeat that. Let's take some decisions."
Russia’s official opposition parties in parliament are normally docile, largely supporting the government line and shying away from any direct criticism.
Zyuganov’s comments follow the recent release of data indicating that the Russian economy contracted 1.8% in the first two months of the year.
Although it also shrank in 2022 – the year of its invasion of Ukraine – the Russian economy has proven unexpectedly resilient in response to sanctions, posting consistent growth figures in the years since.
This growth slowed in 2025, falling from 4.9% in 2024 to just 1%, which has largely been attributed to the coordinated effort of western sanctions on its oil exports.
The 20th package of EU sanctions was stalled by a Hungarian veto at the end of last year. However, this looks to have been finally removed following a diplomatic breakthrough yesterday (22 April), with the recent election of Péter Magyar as Hungary’s PM looking likely remove one of the EU’s consistent blocker of sanctions on Russia.
You can read more about that development, and more, in today’s member-exclusive Europe Trade Digest.
Middle East conflict
Although US President Donald Trump declared he would extend the ceasefire with Iran at the start of the week, calm in the Strait of Hormuz hasn’t followed.
After two vessels were seized by Iran’s Islamic Revolutionary Guard Corps yesterday, shipping firms have warned that it won’t be possible to return to the route without a peace deal.
Stena Bulk CEO Erik Hanell told the BBC’s Today Programme that “we definitely need guarantees from both Iran and the US” before the company would consider sending a ship through the strait.
While arrangements for further talks in Islamabad are ongoing, the current situation appears to be at an impasse, with Iran’s chief negotiator stating that its “not possible” to reopen the strait in light of “US violation of the ceasefire”.
This includes “breach of commitments, blockade and threats”, according to Iran’s President Masoud Pezeshkian.
The US’ chief negotiator, Vice President JD Vance, has not returned to Islamabad for negotiations and Trump has said that there is “no time pressure” to reach a deal.
Elsewhere in the headlines
- Keen for Iceland to join the EU, Brussels could be set to offer the island nation exemptions on fishing policy – a point of contention when Iceland last made a bid to join the bloc which ended in 2015
- The Iran war has brought price warnings on common drugs in UK and a reduction in flights by airline Lufthansa, as a result of the disruption caused by the conflict
Yesterday in Trade
- UK inflation rose in March as disruption from the Middle East hit prices
- US plans to form a critical mineral club to counter Chinese dominance in the sector hit a road bump as potential members winced at high minimum price floors
- UK energy secretary Ed Miliband called for the acceleration of the UK’s green transition to protect businesses and consumers from increasing oil and gas prices
