Shoppers could face food shortages and higher prices (Image: Google)
A farmer has warned there could be food shortages and higher prices on Tesco and Asda supermarket shelves as a result of changes to inheritance tax (IHT) hitting UK agriculture.
The warning has been issued by Tom Amery, managing director at , which produces 70 percent of watercress grown in the UK.
The group could be hit by a large inheritance tax bill as the chairman and majority shareholder for the business is in his early 80s. He planned his will believing the more generous agricultural relief on IHT would apply, but this will be cut from 2026.
Mr Amery warned: “If we start selling of any of our farms, the reality is that we wouldn’t be able to keep up with the supply. That would then definitely lead to shortages and intermittence in supply.
“It could actually affect some of the contracts we have. We have contracts with M&S, Tesco, Asda – we’ve supplied Waitrose in the past, we could be supplying Waitrose in a couple of years’ time. All of those retailers need this consistent production process.
“If you don’t supply these contracts consistently and you’re not producing the crop every day of the year, that’s when they get wobbly and they can withdraw products off the shelves.”
The business is based in Dorset and Hampshire with farms in Spain, and they have been growing overseas for about 30 years.
Mr Amery also warned that the IHT change could result in higher food prices for consumers, as farmers see their costs go up.
“There will be quite an uptick in food inflation. Some farms are going to start shutting down, therefore the volumes decrease, therefore nationally the price will go up.
“This is going to unravel itself over the next two to three years. We’ll start to see considerably more intermittency of supply and also increased costs on the shelves.”
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The Watercress Company could be affected by changes to inheritance tax (Image: The Watercress Company)
He said this “uncertainty” is particularly frustrating for his business as they are currently looking to up their investment in the UK by buying more farms.
“If we start selling off farms, the kind of person that’s going to buying those farms are high wealth.”
There has been a major loss of watercress farming in the UK, as in the 1950s there were about 1,000 acres of watercress beds whereas now there are only 100 acres.
Another farmer worried about the change to inheritance tax is Rich Clothier, managing director at .
He said families could see their weekly food bills increase, saying of the policy change: “This penalises producers that farm in a way that consumers both in the UK and global market are looking for with high welfare, ethics, and less intensive systems.
“These changes will lead to higher food prices for consumers as farmers pass on the additional costs. The sectors affected include dairy, meat, cereal, fruit, and vegetables.”
He also said it could lead to overreliance on imported foods with the UK already “massively exposed” to global market issues.
He said: “We have 150 farmers that supply us at Wyke and we know them all personally, but even we can’t model the potential effect of this.
“Inheritance planning is very difficult to discuss, especially for farmers who are very private people with often complex family dynamics.”