IGD - Economics bulletin 8 January

Date : 08 January 2021

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

The Welsh government has announced that schools and colleges will stay closed to most pupils until the February half term unless there is a "significant" fall in Covid-19 cases.

Current lockdown restrictions are expected to be strengthened in Wales. The First Minister of Wales has stated that “given the fact that the new variant is so much easier to catch... we are looking at supermarkets and other places where people leave their homes, to make sure they are organised in a way that keeps their staff and customers safe.”

This follows the introduction of a lockdown on 20 December.

National lockdowns are also in place in England, Scotland and Northern Ireland.

Trading and supply chain

Overall, the supply chain remains resilient following elevated demand resulting from the national lockdown in England and following the recent delays at Dover.

Shopper stockpiling

Latest IGD research conducted 6-7 January has shown that 45% of shoppers claimed to have stockpiled or bought extra recently due to COVID-19, rising to 61% in London. This has declined from 53% in research conducted 18-20 December. In comparison, claimed stockpiling due to the UK leaving the EU is lower and stable at 21% (24% in December). This rises to 42% in London.

38% plan to stockpile due to COVID-19 (compared to 42% in December) and 21% plan to stockpile due to EU Exit (29% in December).

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.

Absence

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.

Mass testing

It is expected that the roll out of mass testing will help to stop the spread of COVID-19 and reduce absence rates.

Following earlier pilots, Defra is working with the Department of Health and Social Care (DHSC) to start the controlled ramp up phase of mass testing among 70 volunteer food and grocery manufacturers, in order to prove and refine the model before a wider roll out later in January.

Defra is expected to reach out across the industry with more information on how to opt into the mass testing offer.

Pilots of serial testing in food manufacturing settings will assess their effectiveness in preventing outbreaks. This involves daily testing of low-risk contacts of those testing positive for COVID-19. The Department of Health and Social Care (DHSC) is keen for more companies to come forward to take part in the pilots.

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

Following the end of the transition period, UK borders and ports are still reported to be running reasonably well, with goods moving into and out of the UK. Although it should be noted that freight volumes are currently much lower than usual.

Concerns have been raised about possible delays in the weeks ahead. The government will be monitoring flow at the borders as volumes increase in the coming weeks.

There are reports of delays on freight entering the Republic of Ireland. Customs authorities have provided advice to hauliers and truck drivers moving goods from GB into Irish ports.

Issues with entry summary declarations (ENS) have led the Irish Revenue Commissioners to say it was providing a "temporary easement" which would allow an ENS to be produced without all the normally required information.

The French government has announced that the requirement for hauliers needing to test negative for COVID-19 within 72 hours of leaving the UK for France is to continue.

The UK government has announced that all international arrivals to England, including UK nationals, will be required to present a negative COVID-19 test taken up to 72 hours prior to departure.

Rules of origin

There continue to be concerns about the application of the rules of origin (ROOs), particularly relating to rules on cumulation for goods transiting through the UK from EU to the Republic of Ireland.

The ROOs are intended to ensure that only goods genuinely produced within the EU or the UK get special tariff treatment.

Goods falling outside the strict definitions can still be traded but are subject to tariffs in the usual way.

Defra is expected to host a series of sector specific webinars on ROOs over the coming days.

EU Exit support for businesses

Register here for IGD’s next EU Exit webinar on 13 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 including an EU Exit Checklist. Businesses may also wish to refer to the EU EXIT Foodhub, an FAQ website for food and drink businesses

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