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How Will the Scottish Referendum Affect Food Prices?

History will be made tomorrow when the people of Scotland vote for or against becoming an independent country. But how would becoming independent affect day-to-day food prices?
September 17, 2014, 5:36pm
Photo via Flickr user Robert Gaskin

History will be made when Scottish voters go to the polls tomorrow to decide whether Scotland should be a free country.

It's going to be a big day. The Guardian reported that Yes Scotland estimates that 35,000 activists from 300 local Yes groups across the country will make contact with 1.5 million voters on the day. At the time of reporting, Better Together had already made 50,000 calls in only 48 hours and will have more than 25,000 activists spreading their No message tomorrow.

The referendum has seen a record number of people registering to vote, with 97 percent of the adult population ready to hit the polling stations tomorrow. A total of 4,285,323 registered voters makes the referendum the biggest electorate the country has ever known, and puts our 65.1 percent turnout rate for the 2010 general election to shame.

But we weren't really in a position, like the Scottish will be tomorrow, to vote for either one thing or its complete opposite. Westminster politics don't have polar opposites; we either vote for one party, another party that's vaguely similar but mostly worse, or a left-field minority group that will never make it. Such is the nature of this referendum that people from every background are taking to the streets and actually talking to each other. It's amazing to watch a political moment unfold where people's votes truly make a difference.

An independent Scotland would mean something different for everyone. One of the main worries for those in the Better Together camp is rising costs—higher interest rates, higher taxes and, potentially, higher food prices. Will Scottish people pay more for food if they become independent?

The short answer is: possibly.

Supermarkets in the UK set their own prices based on wholesale costs, the prices their competitors are selling products at (hence those bright "20p cheaper than Tesco!" stickers you might see on your Persil box in Sainsbury's) and myriad other variables. According to the BBC, prices in major supermarkets don't differ much in England, Wales, Northern Ireland and Scotland—even with the public health levy on alcohol and tobacco in Scotland (which will be ending next year) and higher distribution costs up there that are currently soaked up in the big companies' margins here in the UK.

If supermarkets decide to treat Scotland like an international market, though, they could dispense with the national pricing policies currently in place. Asda, for example, said if Scotland become independent it would have to establish a separate Scottish business—the costs of which would be reflected in its products. Morrison's CEO told The Financial Times last December that independence could increase food prices, and John Lewis (which also means Waitrose) told the BBC that costs, and therefore prices, were "likely" to rise on a Yes vote.

All the big UK supermarkets are always involved in pricing wars, with prices being slashed left, right and centre to stay competitive with one another. If, say, Morrison's increased its costs in Scotland stores, there's a potential for Sainsbury's to turn around at some point and say, "Hey, suckers, we're going to do a PRICE FREEZE!" in order to steer the flock. This would obviously take a while.

Scotland's food and drink industry is a huge business. From whisky—for which independence could bring trouble—to those heavenly orbs of joy known as Tunnock's tea cakes (which were seen dancing merrily at the opening ceremony for the recent Commonwealth Games in Glasgow), the industry employs 330,000 people and is worth £9.2 billion, taking the £3.2 billion fish and farming sector into account. And of course, Scottish people want to eat Scottish produce—why wouldn't they? It's some of the best in the world. Companies like Tesco say they source a lot of their fresh ingredients from Scotland, and earlier this year promised that all fresh beef in Scottish stores would be from Scotland. So in that respect, fresh stuff might get cheaper.

If you're someone who has the means to shop independently, i.e. from the many exemplary fishmongers, greengrocers and butchers across the country, chances are, save potential tax increase, a Yes vote won't make a huge difference on price to the customer. Their produce is already sourced and processed locally—there is no middle man to pay.

Of course, none of the above is an argument for or against independence—representatives from all the major companies have made that quite clear. It's easy to see why people under the Better Together umbrella are nervous when it comes to potentially rising food prices, though, particularly when figures show that the amount of people given three days emergency rations from food banks increased from 14,000 to 71,428 between April 2013 and March 2014.

Still, Deputy First Minster Nicola Sturgeon says a Yes vote could potentially ease the need for food banks, which are a result of the Coalition Government's benefit cuts. A government Scotland didn't want.

Whatever happens tomorrow, the result will be a direct reflection of the Scots' trust—or lack thereof.