A breakdown in Brexit negotiations could cost supermarkets £3.1bn in annual food and drink bills, according to the British Retail Consortium.
The BRC said that, if there is no breakthrough in negotiations, 85% of food imported from the EU is expected to face tariffs of more than 5%.
Andrew Opie, the group’s director of food and sustainability, said: “With just weeks to go, it is alarming that there has still been no deal agreed with the EU, putting customers in line for a £3bn tariff bombshell.
“Currently, four-fifths of UK food imports come from the EU and without a tariff-free deal, supermarkets and their customers face over £3bn in tariffs from 2021.
“Retailers are doing everything they can in time for 1 January but no amount of preparation for retailers can entirely prevent disruption to food and other essential goods that come from or through the EU.
“With negotiations entering the eleventh hour, protecting UK and EU consumers from billions in tariffs must be the top priority.”