IGD - Economics bulletin 15 January

Date : 15 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.

Ports and transport

Although goods continue to flow across all the borders, volumes remain significantly lower than usual, and many businesses are reporting difficulties in adapting to the new requirements following the end of the transition period with the EU. In particular, some businesses are experiencing significant challenges in moving goods from Great Britain to the island of Ireland. 

As freight volumes increase, concerns have been raised about possible disruption in the weeks ahead due to various capacity constraints, including a shortage of customs agents and European hauliers available/willing to travel to the UK.

The government will continue to monitor flow at the borders.

Northern Ireland

The government is working with industry to prepare for the end of the grace period for authorised traders on 31 March, when new certification requirements for moving goods to Northern Ireland will be introduced. Defra is working closely with the Department of Agriculture, Environment and Rural Affairs (DAERA) in Northern Ireland and is expected to develop a new digital system over the coming months with the aim of reducing costs and administrative burdens for industry.

Trading and supply chain

With delays in moving goods to Northern Ireland, there continue to be reports of challenges to the supply chain, particularly for fresh food.

Overall, the supply chain for the rest of the UK remains resilient, despite some reports of delays in importing fresh and chilled products, as suppliers adapt to new processes following the end of the transition period with the EU.

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

Scotland COVID-19 restrictions

The Scottish government has introduced a strengthening of lockdown restrictions from tomorrow. This includes:

  • Non-essential click and collect retail services will be prohibited in Level 4 areas
  • Customers collecting takeaway food will only be able to do so outside the establishment
  • Working from home to be the default position

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. Defra has reiterated the importance of those working in the food and drink supply chain with Environment Secretary George Eustice sharing an open letter thanking them for their efforts.

Wholesale Food Sector Survey

The latest Defra industry sector survey provides a key opportunity for businesses to share intelligence with the government on the impacts of EU Exit and the new COVID lockdown restrictions on the wholesale sector. The survey is open until 23.59 on 17/01/2021.

Travel restrictions

The government has announced a ban on all travellers from destinations across South (and Central) America, Portugal, Panama and Cape Verde. The new travel restrictions, which came into effect from 4 a.m. Friday 15 January, comes in response to new evidence highlighting the likely spread of a new COVID-19 variant in South America and to countries with strong travel links with Brazil.

All those wishing to travel to the Netherlands by aircraft from 15 January will be required to present proof of a negative result of a rapid COVID-19 test before departure. This should be conducted no more than 72 hours before entering the Netherlands.

GDP

The UK economy declined by 2.6% in November as England went into its second national lockdown. This follows six consecutive months of growth. November GDP fell back to 8.5% below the levels seen in February 2020.

More economic news and analysis