CEO's Weekly News for 22nd July 2019

Barclays Retail Update: Consumers provided a positive outcome for the UK economy as retail sales rebounded in jun’19, offsetting retail weakness in apr’19 and may’19. However, the contribution of retail to q2’19 consumer spending remained subdued at 0.1pp (percentage points), while its contribution to the index of services is zero. Following weak retail sales in apr’19 and may’19, retail sales rebounded in jun’19 by 1.0%. All four main sectors contributed positively, with non-food store sales providing the largest contribution. This was unexpected as compared to data by BRC (British Retail Consortium) retail sales monitor, which had signalled a weakness. The contribution of retail to the index of services is flat, while its contribution to household consumption stands at 0.1pp.

The labour market was resilient in May’19 with 3.8% unemployment but job creation slowed down and the increase in weekly earnings growth was likely to be driven by temporary factors. Hiring increased in jan’19, but now it appeared that employers would rather increase hours worked. Pick-up in core earnings growth likely to decrease in the coming month. Weekly earnings growth was stronger than expected but, as highlighted in jun’19, these continue to be driven by temporary factors and by hours worked. The ONS (Office for National Statistics) highlighted that annual growth in core and headline pay was driven primarily by a public sector one-off pay band increase in apr’19 for NHS staff and the introduction of the higher rate of national minimum wage supporting the lowest paid in private sectors.

Barclays stated that current labour market tightness may not be sustained in the coming months. further, it is likely to reduce in line with weaker activity. Employment growth was 3k in May’19, with a reduction in the number of employees hired, offsetting the increase in self-employed.

Brexit Update; Bord Bia the Irish state agency that promotes Irish food and drink has produced a Brexit Barometer to help businesses prepare for Brexit and consider your readiness.

Brexit Barometer: industry findings

https://www.bordbia.ie/globalassets/bordbia.ie/industry/bord-bia-brexit-pdfs/barometer-

2019/brexit-barometer-2019-industry-findings.pdf

Brexit Barometer: recommendations

https://www.bordbia.ie/globalassets/bordbia.ie/industry/bord-bia-brexit-pdfs/barometer-

2019/bord-bia-brexit-2019-reccommendations-report.pdf

CBI EU Update: President approved…The European Parliament had one final important job to do this week before it broke up for the summer break – to approve the new Commission President-designate – Ursula von der Leyen. The surprise compromise candidate put forward by EU heads of state and government earlier this month won the approval of the European Parliament by the smallest of majorities -383 in favour with 374 against. …but not without offering many compromises In order to win over support of parliamentarians, the German Christian Democrat had to look for support from other political groupings in the European Parliament as her European party, the EPP, does not command a majority. To gain this support, Von der Leyen had to make a number of compromises and promises, some of which could have significant implications for the business community. One of the major commitments of Von der Leyen was that in her first 100 days she would propose a European Green Deal, including the first European Climate Law which will enshrine the 2050 climate neutrality target into law – a key demand from the Greens who have seen their numbers of MEPs increase in this parliament. There are other commitments in the Green Deal that will cause concern for a number of member states, notably the proposal to extend the Emissions Trading System (ETS) to cover the maritime sector and in time all traffic and construction as well as a commitment to reduce the number of free allowances to the airline sector. Perhaps one of the most controversial commitments from Von der Leyen’s Political Guidelines for the next Commission is a proposal to introduce a Carbon Border Tax which is compliant with World Trade Organisation (WTO) rules. This idea has been floating around for some time, but the decision to press ahead with it in the next Commission is likely to be met with fierce opposition from a number of Member States as well as other trading partners who will see such a tax as a Non-tariff Barrier (NTB).Aside from the European Green Deal, Von der Leyen has committed that in all FTAs going forward, the EU would insist on having a dedicated sustainable development chapter, with the highest standards of climate, environmental and labour protection, with zero-tolerance on child labour. Given the pledge on climate and environmental protection, it remains to be seen how this will pan out in the current FTA negotiations with the US, given the current US Administration’s opposition to the Paris Climate Accord. Moreover, Von der Leyen has agreed to pursue a digital tax if the OECD doesn’t deliver anything meaningful by 2020, another area where the US and many member states, notably Ireland, will be in strong opposition. Over-promised but will under-deliver In order to gain the support, the new Commission President has surely committed herself and her fellow Commissioners to deliver an ambitious work programme for the years ahead. However, it is worth remembering that the Commission merely proposes legislation and that it is the European Parliament and member states who ultimately agree the laws. With unanimity required on taxation and varying degrees of support for a climate neutrality target by 2050, it is fair to expect that many of the ambitions put forward will be moderated or extinguished in the EU’s co-decision process. What’s next on Von der Leyen agenda? The next big challenge for the Commission President is to form a new Commission. She has made it clear that she wants a gender-neutral Commission but this may be a tall order. Over the summer, Von der Leyen will liaise with EU governments, including the UK, to present their candidates and it will be up to her to decide the structure of the next College of Commissioners as well as what portfolios each Commissioner will be designated, something which involve a lot of horse-trading. Once formed, the European Parliament will hold hearings with each Commissioner-designate and will then vote on whether to accept or reject the Commission as a whole. Given that many in the European Parliament were unhappy that EU leaders did not accept the Parliament’s preferred candidates for Commission President, expect some power play. It is most likely that the Parliament will want to wield its power over the Commission and will likely take a scalp, rejecting one or more individual Commissioner-designate before granting its approval, thus making the 1 November deadline for the new Commission to take office look ambitious.

New Supply Chain Consultation Launched on Modern Slavery: The UK government has committed to strengthen section 54 (transparency in supply chains requirements) of the modern slavery act. the government is now gathering views on proposed measures intended to increase transparency and compliance, improve reporting quality and extend the scope of the legislation through its open consultation referred as transparency in supply chains. The UK’s landmark transparency in supply chains legislation has been a crucial part of the UK’s commitment to end modern slavery by 2030. The government is likely to ensure a fair chance for responsible businesses by recognising effective anti-slavery activity and a commitment to improvement, but also by targeting non-compliance and further embedding the reporting requirements. It is interested in knowing the opinion of supply chain leaders on how UK can best improve the quality of reporting, ensure compliance and apply the requirements to the public sector. in doing so, they want to ensure that their approach is effective, proportionate and straightforward. Under the modern slavery act 2015, the UK became the first country to require organisations to publicly report on the steps that they are taking to prevent modern slavery in their operations and supply chains. This legislation was designed to empower investors, consumers and NGOs to scrutinise the efforts being taken by large businesses to prevent forced labour and protect workers in their operations and supply chains.

The British Nutrition Foundation have launched their updated 5532 guide to portion size for pre-schoolers.

The guide provides advice on food groups and suggested portion sizes for 1 – 4 year olds to support a healthy balanced diet, including:

Starchy foods – about 5 portions a day
Fruit and vegetables – 5 or more portions a day
Dairy foods – about 3 portions a day
Protein foods – about 2 portions a day (3 portions for vegetarian or vegan children)

The guide includes updated information on free sugars, including guidance on choosing lower sugars options and advice to dilute fruit juice and to only provide this at mealtimes. It also includes updated guidance on vegan and vegetarian diets, to ensure adequate intake of nutrients such as iron and zinc.

Please visit the BNF website for further details on the 5532 guide, as well as a downloadable poster and leaflet.

ECJ upholds ECHA decision BPA a substance of “very high concern”

The European Court of Justice (ECJ) has ruled that it was appropriate for the European Chemicals Agency’s (ECHA’s) Member State Committee, to decide to identify Bisphenol A as a substance of very high concern as it met the criteria set out in Article 57(c) of the REACH Regulation. This decision was contested by Plastics Europe, which argued that the ECHA breached the principle of proportionality and committed “a manifest error of assessment“ by failing to take into consideration information on the intermediate uses of Bisphenol A.

EFSA consults on 2 GMOs

The European Food Safety Authority (EFSA) is consulting until 8 August on 2 scientific opinions concerning 2 genetically modified organisms (GMOs) for which applications have been made for food and feed uses. The first opinion concerns maize MON 87427 × MON 89034 × MIR162 × NK603 and sub-combinations; the second opinion concerns soybean MON 87708 x MON 89788 x A5547-127. Both applications were submitted by Monsanto.

Life expectancy trends in the UK: Lord Mendelsohn has asked the Government what assessment it has made of why the UK had one of the largest slowdowns in improvements in life expectancy between 2011 and 2016 out of the 19 countries analysed by the Office for National Statistics in August 2018. In response the Health Minister, Baroness Blackwood Of North Oxford, said that life expectancy is as high as it has ever been in this country, but the rate of increase in life expectancy has slowed down in recent years. She referred to a Public Health England review of recent trends in mortality, which compares England to other parts of the UK, the EU and the USA, and cited various factors for the results, including the slowdown in improvement in mortality from heart disease and stroke, which are the leading causes of death. She acknowledged that this is partly influenced by the increasing prevalence of diabetes, obesity, and low physical activity.

CampdenBRI Seminar: Are baked goods safe? – food safety challenges in the bakery

Seminar: Friday 20 September 2019
Campden BRI, Chipping Campden, Gloucestershire, GL55 6LD, UK

Members of Campden BRI: £250 + VAT
Non–members: £350 + VAT

Group discounts available on request. Contact Sian Twinning

FDF Events:

10 October | Plastics and Packaging

Plastics and packaging is one of the biggest issues currently facing the food and drink industry. Manufacturers have relied on plastic for many years, however, the environmental impact means the pressure is on for alternatives and reducing its use.

Join our excellent panel of speakers to discuss new technology and innovation, how businesses can improve their footprint, and the new regulatory and legal challenges that are ahead. Register your interest here.

19 November | Food Safety Conference

This is an unmissable event for those in the technical and regulatory world of food and drink. Each year, our expert speakers tackle the biggest issues facing our industry, discuss new technologies, and look at future opportunities. Join us for a valuable day of insights and networking.