Keir Starmer’s flagship EU trade deal threatens to make soaring checkout prices even worse, food and drink manufacturers have warned. They are urging the Prime Minister to slow down his planned EU “reset”, due to be confirmed at a major summit in the summer. Energy shortages caused by the Iran war have already pushed up prices for hard-pressed shoppers. But research by the Food and Drink Federation found more than 400 UK regulations will need to be brought into line with Brussels laws as part of the planned trade agreement, forcing UK businesses to make costly changes to supply chains and manufacturing processes.

It says a new EU deal will cut costs in the long run but has warned Ministers that firms need at least two years to adapt. However, the Department for Environment, Food and Rural Affairs has rejected the plea, and insists that the agreement must come into force by the middle of 2027. Checkout prices for food and drink are forecast to rise by 9% due to soaring energy bills caused by the Iran conflict. The Federation, which represents household names from Birds Eye to Weetabix Ltd, says Government decisions are adding to costs.

Chief Executive Karen Betts said: “Businesses are going to have to make changes to their supply chains and operations because of likely rapid re-alignment with EU food law.”

She also highlighted a scheme called Extended Producer Responsibility (EPR), which requires producers and retailers to contribute to the cost of recycling packaging with fees of £1.4 billion annually.

In addition, the Government is planning further restrictions on food with high salt or sugar content, even though the latest rules only came into effect in January.

Ms Betts said: “This all means that industry is fighting inflation with one hand tied behind our backs by complex regulatory compliance.

“Government must urgently prioritise what it wants of the food industry to enable us to fight inflation effectively and to help protect households from the impact of the current energy shock.”

And in a warning to MPs, she told the House of Commons Environment, Food and Rural Affairs Committee: “When we have a whole range of changes coming at us at one time, that increases the cost on companies.”

Sir Keir has put a “reset” of UK-EU relations at the heart of his programme for government. In a speech following local election defeats earlier this month, he committed to “putting Britain at the heart of Europe”.

This includes a new deal on food, drink, plants and animal products, called the Sanitary and Phytosanitary (SPS) agreement, which the Government expects to be worth £5 billion to the UK economy.

Guidance published by the Department for Environment, Food and Rural Affairs last week suggested it will mean an end to paperwork or physical checks on dairy, fish, cheese, eggs and fresh red meat for both British exporters to the EU and EU exporters to the UK.

The agreement is due to be finalised at a major EU-UK summit in the summer, though no date for this meeting has been confirmed.

The timetable for implementing the deal was set out by the Department for Environment, Food and Rural Affairs in a statement to a Commons committee. The Department said: “It is our intent that the agreement will take effect in mid-2027. We have been listening to businesses and understand concerns raised about how the new agreement could affect them. We know that some businesses require longer to adjust to the new arrangements and will continue to work with them to ensure a smooth transition.”

Shadow Environment Secretary Victoria Atkins accused the Prime Minister of re-opening divisions over Europe. She said: “Keir Starmer is looking to reopen old divisions in a bid to appease his left-wing backbenchers and shore up his faltering premiership.

“At a time when the economy is flatlining and families are already struggling with rising costs, the last thing Labour should be doing is making the weekly shop even more expensive.

“The Government should put UK consumers and food producers first, not foreign farmers. That is why Conservatives would abolish the fertiliser tax, hold a rapid review into the packaging tax called the Extended Producer Responsibility scheme, scrap the Family Farm Tax and deliver our Cheap Power Plan to cut bills for us all including food producers.”

A Government spokesperson said: “Our food and drink deal could add up to £5.1 billion a year to our economy, slashing the costly red tape and removing unnecessary barriers for British food and drink exports, working closely with industry representatives like the Food and Drink Federation.

“By cutting unnecessary delays and paperwork at the border, the agreement will make it easier for businesses to sell our world-class produce to European customers, support jobs, and help ease pressure on food prices for families.”

The British Retail Consortium has also urged the Government to cut regulation in order to keep food prices under control. Andrew Opie, Director of Food and Sustainability at the BRC, said: “The conflict in Iran has strained supply chains and placed additional cost burdens on businesses across the retail industry. Food inflation is set to rise over the next 12 months significantly as a result. While the Government cannot control events overseas, it can pull domestic policy levers that impact retailers and their customers. The packaging tax (EPR) will cost retailers £1.6 billion this year and the Bank of England has confirmed that the policy will add 0.5% to food inflation.”

Rising energy prices pushes up the cost of fertiliser and diesel used to power farm machinery, as well as the expense involved in heating greenhouses.