Your overview of political and economic news with a focus on the food and consumer goods industry, featuring the latest developments and guidance on COVID-19 and adapting to a new relationship with the EU.
COVID-19 restrictions in supermarkets
The government is working with supermarkets to strengthen the enforcement of COVID-19 store safety measures. At the time of writing, both Sainsbury’s and Morrisons have announced that customers who refuse to wear face coverings will be refused entry to their stores.
This follows reports that there is lower compliance with lockdown laws compared to the previous lockdown last year.
Trading and supply chain
Overall, the supply chain remains resilient in Great Britain despite continued elevated demand resulting from lockdown restrictions, including the closure of hospitality venues.
Latest IGD research conducted 10-12 January has shown that 50% of shoppers claimed to have stockpiled or bought extra recently due to COVID-19, rising to 65% in London and Northern Ireland. This has increased from 45% in research conducted last week. In comparison, claimed stockpiling due to the UK leaving the EU is lower at 26%. This rises to 46% in London and 31% in Northern Ireland.
45% of shoppers plan to stockpile due to COVID-19, up from 38% last week and 27% plan to stockpile due to EU Exit (21% last week).
IGD will continue to track changes in shopper behaviour in our ShopperVista research and will be measuring any current and planned shopper stockpiling.
ShopperVista subscribers can register for our Christmas Review webinar on 14 January. This will reveal the impact COVID-19 has had on Christmas celebrations and shopping behaviour.
Rising absence rates continue to be a concern and are currently in excess of 15% for some organisations in London and the South East, due to the new variant of COVID-19.
Concerns have been raised around the rules on children of critical workers and access to schools, with the guidance not being applied consistently at a local level. This is leading to additional staff absence in the food industry.
The government is aware that there have been reports of increased number of contacts of people testing positive being required to self-isolate.
The government has announced the introduction of asymptomatic testing across all local authorities in England targeted at people who cannot work from home. It is expected that the roll out of mass testing will help to stop the spread of COVID-19 and reduce absence rates.
Mass testing among 70 volunteer food and grocery manufacturers continues as part of the controlled ramp up phase, in order to prove and refine the model before a wider roll out.
Pilots of serial testing in food manufacturing settings are also assessing their effectiveness in preventing outbreaks. This involves daily testing of low-risk contacts of those testing positive for COVID-19. Defra and the Department of Health and Social Care (DHSC) are keen for more companies to come forward to take part in mass testing.
DHSC has published a list of private sector (non-NHS) providers who may be able to conduct tests for the presence of coronavirus.
Ports and transport
Although UK borders and ports are reported to be running reasonably well, with goods moving into and out of the UK, freight volumes remain much lower than usual, and some businesses are experiencing significant challenges in moving goods from Great Britain to the island of Ireland.
There are no fundamental supply chain issues at this stage in the island of Ireland, but the challenges in moving goods are resulting in some reduction in ranges available for shoppers.
Concerns have been raised about possible delays in the weeks ahead as freight volumes increase. The government will continue to monitor flow at the borders.
One of the issues that is creating challenges in moving goods, both to Ireland and the rest of the EU, is groupage – where a mixed load is moved between markets and all items must have correct paperwork. The complexity and volume of paperwork required for consolidated loads can be very significant. Although government officials are working with the industry to identify any measures to help simplify processes, and to provide additional guidance, all businesses will need to meet the requirements under the EU-UK Trade and Cooperation Agreement.
Rules of origin
Defra is looking to provide further support for the industry around the application of the rules of origin (ROOs), including hosting a series of sector specific webinars on ROOs over the coming days.
There is a particular concern relating to rules on cumulation for goods transiting through the UK from EU to the Republic of Ireland. Officials in Defra and HMRC are looking at possible options to support the industry and enable goods to move in this way without them being subject to tariffs. This includes the potential use of custom warehousing and returned goods relief.
EU Exit support for businesses
Register here for IGD’s next EU Exit webinar on 20 January which will bring you up to date on all the key issues:
- The new trade deal – what’s in it?
- Northern Ireland Protocol – latest changes
- Business experiences
- Covid-19 and the consumer
The UK government has issued guidance specifically for food and drink businesses. IGD has also provided additional support to help businesses with EU Exit. Businesses may also wish to refer to the EU EXIT Foodhub, an FAQ website for food and drink businesses