Fairtrade Foundation raises fears over UK government temporary tariff cut plans

Significant concerns have been expressed by Fairtrade Foundation over government plans for a temporary reduction in tariffs on more than 100 food items including chocolate confectionery, cocoa powder, crisps and biscuits, amid a cost of living crisis, writes Neill Barston.

The government has set out its plans to be introduced this summer, in the wake of the Iran war, that has seen prices in a number of segments surge notably – with wider food and drink costs seeing significantly above inflation rises during the past year (by up to 20% in some confectionery categories) in the months before the latest Middle East conflict that has caused notable business disruption.

Fairtrade Foundation, which is set to play its part in our World Confectionery Conference on 10 September, has raised fears that any move to reduce tariffs on products including cocoa could have a negative impact on key arrangements for farming groups’ levels of pay in producing nations including Ghana and Ivory Coast, if retail values are impacted by temporary British tax cuts that are being proposed to support hard-hit UK households.

As Confectionery Production reported this week, the region’s economy remains relatively fragile, with a study for the Food and Drink Federation found that business confidence was down at a level of -64%, with heightened costs of doing business including national insurances payment increases had deterred many companies from taking on younger employees to bolster their employment base.

Speaking on the government’s proposed tariff cuts, Marie Rumsby, Director of Advocacy at the Fairtrade Foundation, noted that while support for consumers was in theory to be welcomed, that this had to be balanced against the complete value chain.

She said: “While we recognise the cost of living pressures facing UK families – and efforts to address them – proposals to suspend tariffs on key food products raise serious concerns about the impact on the farmers who grow them.

“Suspending tariffs on agricultural products risks overlooking the preferential trade arrangements in place for lower-income countries, leaving small-scale farmers unable to compete with heavily subsidised, mass-produced exports from wealthier nations. The result can be devastating — pushing producers out of business and deepening rural poverty.”

Moreover, as Fairtrade asserted, farmers producing everyday staples like bananas, sugar and cocoa are already struggling with rising input costs, disrupted trade routes due to the Iran conflict, and escalating climate shocks. Many are paid below the cost of production. Any further squeeze risks undermining their livelihoods and threatening long‑term supply.

She noted that the government should, in Fairtrade’s view, place greater priority in building fairer, more resilient supply chain – including introducing mandatory human rights and environmental due diligence (HREDD) so businesses are accountable for their global impacts.

The government is seeking consultation from industry this month on its plans for the tariff reductions, which it is carrying out in a bid to promote economic growth, which has remained stagnant amid notable levels of hesitancy with many spheres of industry in the region.

Speaking on its tariff move, Chancellor of the Exchequer Rachel Reeves, commented: “My number one priority is protecting households from rising costs. This summer I want every family to be able to enjoy themselves, that’s why we’re launching the Great British Summer Savings Scheme, and why we’re helping kids with free bus travel throughout August.

“As the war in Iran pushes prices up at home, my economic plan is the right one. I will continue to make the right choices, to protect households and businesses, and build a stronger and more secure Britain.”