TESCO has announced it is stockpiling food and warning customers they will face shortages and steep price increases in the “worst-case scenario” of a No-Deal Brexit.

The UK’s biggest supermarket has warned it is building up stores of long-life supplies as Boris Johnson struggles to find a way through the deadlock in trade negotiations.

A final deadline for this Sunday has been set for negotiators on both sides to reach an agreement.

If no new agreed trade arrangement is made Britain will do trade with the EU on World Trade Organisation (WTO) terms – a move which will means tariffs on both import and export goods including food.

John Allan, the chairman of Tesco, said: “Tesco is getting ready for the worst-case which is a no deal, trying to ensure as much as we can that we stockpile long-life products either in our warehouses or with our suppliers. We are trying to minimise the risk of food being caught in what is probably going to be the most difficult place, which is the port of Dover.

“We may have some shortages of fresh foods, particularly short life fresh foods. I think that will only be for a limited period, a month or two before we get back to normal. There might just be slightly restricted choice for a period of time”.

Allan added: “If we leave on a no-deal basis, there will be tariffs and those tariffs will inevitably lead to higher prices.”

He continued: “We can’t rule out the possibility that if there is dislocation at the ports of entry to the UK there will be some shortages of some items of fresh food, at least for a short time. The nation’s supply chain for food will continue but there may be some things we have to learn to live without for a few weeks, possibly a few months.

READ MORE: Scots retailers warn of £3bn bill for shoppers if Brexit No-Deal happens

Fresh foods including some fruit and vegetables which are not produced in the UK are most at risk because they can not be stockpiled in warehouses. Some items, such as continental cheese, could face import tariffs of up to 40%.

Tesco’s announcement comes after the Scottish Government announced on Tuesday it was stepping up contingency plans for a No-Deal Brexit.

Ministers in Edinburgh have also warned of disruption – even in the event of agreement with Michael Russell saying any agreed new arrangement would be a “low deal”.

But Foreign Secretary Dominic Raab suggested Tesco is spreading panic among consumers about the UK leaving the EU and said: “Scare stories about cupboards running bare are nonsense”.

Raab also denied claims made by Allan that food prices could rise after January 1, continuing: “We only get 30% of food from the EU. Stockpiling is a normal part of business”.

The British Retail Consortium said in September supermarkets would face an annual £3.1 billion tariff bill for food and drink with no trade deal.

It also emerged last night that UK holidaymakers could be banned from entering the EU after Brexit under strict coronavirus travel rules that affect non-EU countries – unless officials are able to grant a last-minute exemption.

Asda and Morrisons did not respond to inquiries from the National about whether they were stockpiling food amid fears of a No-Deal Brexit.