IGD - Economics bulletin 22 October

Date : 22 October 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.

Northern Ireland Protocol – next steps

The UK government and EU commission are undergoing a period of intense clarification talks about EU proposals for the Northern Ireland Protocol that are expected to last 3-4 weeks.

The EU proposals on medicines, sanitary and phytosanitary controls (SPS), customs and engagement with Northern Ireland Stakeholders and Authorities are aimed at reducing the amount of paperwork and the number of internal UK border checks.

Some industry representatives have raised concerns over issues in the proposals concerning rules of origin and labelling. There are also concerns about that the EU proposals may not sufficiently address the challenges of moving agrifood products from GB to NI.

Supply chain issues

Following the appointment of Sir David Lewis as the UK governments’ supply chain advisor, the former CEO of Tesco will look at the following four areas in his role up until Christmas:

  • Engagement with different business sectors to learn about the challenges and opportunities
  • A strategic view of UK labour market.
  • Impact of energy and energy prices on supply chains
  • Looking into the need for a supply chain advisory board to look at resilience of UK supply chains.

Download a free copy of IGD’s Viewpont special edition: Focus on Labour Shortages.

The report explores the labour problems encountered in 2021 in more detail and provides actions businesses could take to mitigate this risk in the future

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. See here for more details.

It is expected that the first workers using these temporary visas will start to arrive in early November.

The government is expected to provide more details on proposals to support the pig industry following a one-week consultation that started on 14 October 2021. This included temporary changes to ‘cabotage’ rules, allowing trained butchers to come to Britain on temporary visas and a storage aid scheme in England. The government is expected to announce more details of financial incentives for processing of animals. 

This follows calls from industry for help from the government to address a shortage of butchers. This has led to a welfare cull of some animals.

New Zealand Trade Deal

The government has announced a trade deal with New Zealand.

The trade deal will see:

  • Tariffs removed on ‘a huge range of UK goods’
  • Tariffs removed on New Zealand goods including wine, honey, and kiwi fruits
  • The export market to New Zealand is expected to grow by 30% by 2030

Concerns have been raised by the National Farmers Union that the deal will compromise food standards. Minette Batters, the NFU president said that “we will be opening our doors to significant extra volumes of imported food - whether or not produced to our own high standards.” See here for more details.

UK “Net Zero” strategy

Ahead of the COP26 conference in Glasgow, the government has launched its new “Net Zero” strategy. The strategy includes:

  • Funding for free food waste collection from all UK households from 2025
  • Trial of zero-emission HGV technologies, with sale of new fossil fuel-driven HGVs likely to be banned by 2040
  • 75% of UK farmers to be engaged in low-carbon farming practices by 2030
  • A range of strategies will be used to reduce industrial Greenhouse Gas emissions, including switching to hydrogen fuel, increasing material / energy efficiency, and extending product live

See here for more details

 

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