IGD - Economics bulletin 26 November

Date : 25 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 – a positive update

Speaking at the recent British-Irish Council summit, Michael Gove, Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations, said that both the EU and UK are taking “a constructive approach” in negotiations.

He was “confident” that the UK government would not need to trigger Article 16 of the Northern Ireland Protocol - 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. The French president recently complained that “we have not got what we wanted (in terms of licenses). We will not yield”. 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. It is not clear how long negotiations will continue for.

New Border Operating Model

The government has published details of revised version of the Border Operating Model. In the latest version, the introduction of physical and ID checks on incoming agri-food shipments from the EU will be phased-in over a longer period from 1 July to 1 November 2022 depending on the type of products being imported. Previously all this was planned to be completed by July 2022.

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

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.

Increasing availability concerns

Recent research conducted by IGD has revealed that more adults interviewed experienced shortages of some food and groceries in-store or online recently (68% vs 64% two weeks ago). Availability issues have increased the most for savoury snacks.

There has been little change in the number of adults that have recently felt the need to stock up or purchase more than they normally do (32% vs 34%). There has been little change in the number who say they will or might stock up (37% vs 35% two weeks ago).

This comes as the Wine and Spirits Trade Association have warned about potential shortages over Christmas. They have written to the Transport Secretary to take urgent action including extending the temporary visa scheme (see below) from 28 February 2022 to a minimum of one year.

See here for the latest ONS data on shelf availability.

Labour shortages visa deadlines

All relevant businesses have up until 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.

COVID-19 – Northern Ireland update

Against a backdrop of rising COVID-19 cases, the Northern Ireland Executive has strengthened the message that people should work from home where possible. See here for more details.

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