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.
IGD’s Grocery Shopper Confidence Index showed confidence has remained strong in May, decreasing by just one point to -2, driven by the further easing of lockdown restrictions, continued vaccine roll-out and record temperatures over the second bank holiday weekend.
Financial confidence has reached a new high in recent times of +3. This is the first time more people are expecting to be better than worse off in the year ahead, although this continues to be polarized, with wealthier and younger shoppers remaining the most confident.
ShopperVista subscribers can read the full report here.
First meeting of the UK/EU Partnership Council
This week the UK Brexit Minister, David Frost will meet with Maros Sefcovic, the European Commission Vice-President for the first UK/EU Partnership Council established under the new trade and cooperation agreement. They will review the withdrawal agreement and the operation of the Northern Ireland Protocol.
Operation of the Northern Ireland Protocol continues to challenge both officials and businesses, especially with regard to the movement of agri-foods. With temporary easements ending soon (see dates below), there is reason to believe that difficulties will continue without some change.
In an article in the Financial Times David Frost comments that the UK government had under-estimated the impact of the Protocol and calls for renegotiation and “pragmatic solutions”. Simon Coveney, the Irish Minister for Foreign Affairs and Thomas Byrne, the Irish Minister of State for European Affairs, both responded by backing the current solution.
SME Food Businesses
The UK government launched its Business Climate Hub in September 2020 and it is now encouraging micro and small businesses to join the movement to net zero. The SME Climate Commitment is to cut greenhouse gas emissions in half by 2030 and to zero by 2050.
Look out for IGD’s upcoming guide that will make it easier for more businesses in the food and consumer goods industry to understand the business case for decarbonization and the practical steps they can take to drive change in their operations and their supply chain.
The government is also convening a special event for SME food businesses in Europe, scheduled for 10 June, which will form part of the UN Food Systems Summit. Participants will be encouraged to exchange ideas and solutions for making SMEs part of a transformed foods system.
On 5 June, Finance Ministers from the G7 nations (Canada, France, Germany, Italy, Japan, UK and USA) agreed, amongst other matters, the development of a new structure for taxing global corporations. This is the culmination of many years of negotiation.
The core of this new system will be a minimum corporation tax rate of 15%, with tax to be paid in every country where a business operates, rather than only in the country where they are based. This is expected to increase tax revenues within the UK, creating a revenue bonus for government. Media reporting has focused on the impact of this move on large tech companies, but it would also affect many large consumer goods companies.
Leaders of the G7 nations are meeting in Cornwall this weekend, with guests from Australia, the EU, India and South Korea also present. The location was chosen since Cornwall is a hub for green industries, giving the UK a chance to demonstrate its capability in advance of the COP26 meeting in November.
The agenda focuses on global health, climate change and trade. The G7 does not have executive or legislative power, but it plays an important role in developing the global political agenda.
EU Settlement Scheme deadline
There is less than one month to go before the deadline for EU nationals to register for “settled status” in the UK (see key dates below). EU nationals resident in the UK before the end of 2020 can use the EU Settled Status scheme to protect their rights to live and work in the country (although grant of settled status is not certain – it can be refused). Around 5m applications have so far been made.
The UK government continues to develop the management of borders, with a view to using advanced technology to improve the experience of traders, migrant workers and business sponsors – it recently announced plans for a new phase of changes, but there is no sign of new policy which might make recruitment of lower-skilled foreign workers easier.
Key dates for UK-EU transition and support for businesses
Businesses trading with the EU should be prepared for the introduction of further border controls on the following dates:
- 30 June – The grace period for sending certain Prohibited & Restricted goods (P&Rs) from GB to NI ends.
- 30 June – Deadline for EU nationals to protect their right to reside and work by registering with the EU Settlement Scheme
- 21 August – New model of EHCs is required for POAO exported to the EU, following the end of the transitionary arrangements allowing the use of current EHCs
- 1 October – POAO and all regulated plants and plant products will require pre-notification and health documentation to be imported into the UK.
- 1 October – End of the grace period for supermarkets and their suppliers moving goods into Northern Ireland. The start of a phased introduction of the Export Health Certificates for POAO exported to Northern Ireland from GB.
- 1 January 2022 - Safety and Security Declarations for imports required. Physical checks required at Border Control Posts (BCPs) for POAO and certain animal by-products, and High Risk Food Not Of Animal Origin. Physical SPS checks of high risk plants also to take place at BCPs. Pre-notification requirements and documentary checks required for low risk plants and plant products.
Complete customs declarations for imports to the UK will be required. Importers may no longer defer making declarations. Tariffs will become payable at the moment of import.
- 1 March 2022 – Physical checks at BCPs for live animals and low risk plants and plant products.
The UK government has issued guidance specifically for food and drink businesses.
Register here for upcoming webinars on trading with the EU.
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