IGD - Economics bulletin 10 December

Date : 09 December 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.

New COVID-19 restrictions

In response to the spread of the new Omicron variant in the UK, The Prime Minister announced a move to Plan B of Covid restrictions in England. This will include:

  • From 10 December - Face masks to be compulsory in most indoor venues other than hospitality
  • From Monday 13 December - Those who can are advised to work from home
  • From Wednesday 15 December - NHS Covid Pass to be mandatory only for entry into unseated indoor events with 500 or more attendees, unseated outdoor events with 4,000 or more attendees and any event with 10,000 or more attendees
  • Daily contact testing for contacts of confirmed positive cases of Omicron instead of the 10-day self-isolation period

See here for updates to the workplace guidance.

See further details for COVID-19 regulations in Scotland, Wales and Northern Ireland.

Impact on UK hospitality

UK Hospitality Chief executive, Kate Nicholls, has reacted to the move to Plan B restrictions by stating that “it risks devastating the hospitality sector amid its most important time of the year.” She has called for government support including business rates relief, rent protection and extended VAT reductions.

This follows reports of a downturn in hospitality trade at the start of December after the Prime Minister announced temporary and precautionary measures in England in response to the discovery of the new Omicron variant.

Supply chains and availability

Following a package of support including the issuing of temporary visas for HGV drivers, the government is reasonably confident of ensuring good food supply at Christmas.

Recent research conducted by IGD has revealed that slightly fewer adults interviewed experienced shortages of some food and groceries in-store or online recently (65% vs 68% two weeks ago). Reported availability issues remain highest for savoury snacks.

Slightly more adults have recently felt the need to stock up or purchase more than they normally do (36% vs 32% two weeks ago). There has been no change in the number who say they will or might stock up (37%).

Pork butchers visa deadlines

800 pork butchers have until 31 December to apply 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.

Shopper confidence

Before the announcement of the latest COVID restrictions, shopper confidence had increased for the first time since April 2021 as shoppers prepared for Christmas. See more details of the November 2021 Shopper Confidence Index, from ShopperVista.

GDP slows

Latest data from the Office for National Statistics shows that GDP grew by just 0.1% in October compared to 0.6% in September. Further COVID restrictions may restrict further growth. See here for further details.

UK-EU negotiations

Technical discussions are expected to continue until after Christmas with the EU regarding the Northern Ireland Protocol. There is still reported to be a significant gap between the UK and EU on a number of issues.

The government has stated that it reserves the right to invoke article 16 of the Northern Ireland Protocol. This is the process for taking unilateral "safeguard" measures if either the EU or UK concludes that the Northern Ireland Protocol is leading to serious practical problems or causing diversion of trade.

The UK government also continues negotiations with France and the EU to resolve a dispute over post-Brexit fishing rights.

EU-GB Imports from 1 January 2022

Businesses are encouraged to prepare for changes to the rules regarding imports from the EU to GB from 1 January 2022. See here for further details.

This follows publication of a revised version of the Border Operating Model. Please note that full customs declarations will be required from 1 January (although delayed payment may be possible).

See further details, including our opinion on the latest changes.

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.

Bird flu

The UK’s Chief veterinary Officer has stated that there is a “phenomenal level of bird flu in the UK”. There are 40 infected premises in the UK, 33 in England, with around half a million birds culled so far.

This follows an announcement by the government of a UK-wide housing measures to protect poultry and captive birds against avian flu.

The government is working with industry to look at the impact of the housing measures on the labelling of free-range eggs. Eggs can continue to be marketed and labelled as “free-range” for 16 weeks after the birds have been brought indoors, but if the restrictions last beyond that they must be downgraded to “barn produced”.

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