IGD - Economics bulletin 12 November

Date : 12 November 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, labour shortages and adapting to a new relationship with the EU.

UK-EU negotiations update

Following intense clarification talks with the EU commission about EU proposals for the Northern Ireland Protocol, Lord Frost has stated that it has so far not been possible “to close the substantial gap between our positions and secure a consensual, negotiated resolution”.

There is speculation that the UK government may trigger Article 16 of the Northern Ireland Protocol - the process for taking unilateral "safeguard" measures if either the EU or UK concludes that the deal is leading to serious practical problems or causing diversion of trade. Lord Frost has made it clear that he favours further negotiations before any such action is taken.

The UK government is also in negotiations with France and the EU to resolve a dispute over post-Brexit fishing rights. France had threatened a series of measures that may have led to a ban on British trawlers landing their catches in French ports and tighter customs checks on cross-Channel trade.

Preparing for EU-GB trade from 1 January

Businesses are encouraged to access a series of webinars to help them prepare for changes to the rules regarding imports from the EU to GB from 1 January 2022.

See the Key dates for UK-EU transition and support for businesses

See the guidance on trade with the UK as a business based in the EU.

Christmas preparations and product availability

Despite continuing pressure on supply chains due to operational labour and HGV driver shortages, industry stakeholders are not reporting any further deterioration in service levels and remain focused on preparing for the peak trading period.

This is reflected in recent research conducted by IGD which revealed there has been little change in the number of adults interviewed who experienced shortages of some food and groceries in-store or online recently (64% vs 63% two weeks ago).

There has also been little change in the number of adults have recently felt the need to stock up or purchase more than they normally do (34% vs 35%). There has been a decline in the number who say they will or might stock up (35% vs 45% two weeks ago).

Labour shortages update

All relevant businesses have up until 15 November to apply for temporary visas for poultry workers and 01 December for temporary visas for HGV food drivers. 800 pork butchers have until 31 December for visas from the existing allocation in the Seasonal Workers Pilot Scheme, allowing them to travel and work in the UK for a period of 6 months.  See here for more details.

Slower economic growth

Gross Domestic Product grew by 1.3% between July and September compared to 5.5% in the second quarter. The economy remains 2.1% smaller than at the end of 2019.

A harsh winter ahead

Download a free copy of IGD’s recently published Viewpoint: A harsh winter ahead? report to read our opinion on economic recovery and the longer-term impacts of COVID-19 and EU Exit.

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Our round-up of the latest economic and political news, focused on FMCGs