Dear All.
Apologies but the Weekly News is a day late.
Have a good week.
Gordon Polson – Chief Executive
FOB Limited
SAVE THE DATE: FoB Annual Conference 10th June 2020. British Museum London.
CEO’s Weekly News for 9th December 2019
Barclays Economic Outlook: The conservative party manifesto assured a £3bn⁄year increase in day-to-day spending, which excludes investment. Accordingly, net total spending is expected to increase by £22bn over the five years from 2019.
The manifesto stated the UK’s intention of not to request an extension to the transition period, which is scheduled to end on 31st dec’20. The impact on inflation from lower fiscal stimulus and heightened Brexit uncertainty is likely to be neutral at the first order, with lower domestic demand offsetting slower exchange rate appreciation.
According to the Yougov multi-level regression & post stratification (MRP) model, the Conservatives would win a majority with 359 seats, while labour would only win 211 seats. The analysis suggested that the election is about Brexit, as the switch from Labour to Conservatives appears most pronounced in constituencies that voted to leave.
Growth for Knowledge (GFK) consumer confidence stood at -14 in nov’19. All indexes declined except for personal financial situation over next 12 months’, which remained flat. Additionally, general economic situation over the next 12 months also increased, suggesting that consumers see a possible clearing of the Brexit deadlock following the general election. Meanwhile, consumer credit for oct’19 increased by 6.1% (y-o-y).
In addition, services purchasing manager’s index (PMI) and manufacturing PMI are expected to be 48.7 and 48.3 respectively, which is in line with the weak flash release.
Barclays’ global manufacturing confidence (GMC) index was unchanged in nov’19 and stood at -0.54, reflecting an ongoing stabilisation in global business sentiment at low levels. Major global manufacturing hubs remained out of sync in nov’19, as the US sentiment (ism) declined marginally by 0.2pp.
After reaching the cyclical bottom in sep’19, global PMIs are fluctuating at slightly higher levels, driven by monthly volatility and seasonal factors as the underlying fundamentals remain soft.
Apart from seasonal factors, optimism in China and emerging markets (EM) Asia region likely resides with expectations that a phase 1 trade agreement between the US and China is to be reached. Additionally, recently-emerged hurdles related to ongoing protests in Hong Kong may complicate the US-China trade negotiations and put gradual normalisation of the industrial sector activity at risk.
While the industrial momentum in q4’19 is likely to remain weak, global growth from the industrial downturn is expected to be slow in q1’20. While the US-led trade conflicts and post-brexit EU-UK trade relationships may keep trade uncertainty at elevated levels, global trade outlook is expected to be more constructive in 2020 and the stabilisation in industrial sentiment is likely to be followed by gradual recovery in both production and trade volumes.
Rise of social media is becoming a challenge for UK food manufacturers
Changes in consumer advertising behaviour and the rise of social media are making it more challenging for food manufacturers to tackle the UK’s obesity crisis. There are 13 million UK adults who struggle with obesity. A further one million are admitted to national health service (NHS) hospitals due to related illnesses annually, placing a huge financial burden on health services.
However, with the rise of social media advertising, many consumers are not provided with the same information around the ingredients within their products, making it more difficult to count calories and choose healthy options.
Caroline Cerny, alliance lead at the obesity health alliance stated that advertising is extremely effective in influencing their purchasing decisions and that is why companies spend millions every year. He added that regulating food advertising in the digital space is extremely challenging and it is clear that the current rules do not go far enough to protect children.
Conservative manifesto: In addition to promising more resources to invest in NHS infrastructure and staff, the Conservative party manifesto commits to a “long-term strategy for empowering people with lifestyle-related conditions such as obesity to live healthier lives, as well as tackling childhood obesity, heart disease and diabetes.” The party says it would extend social prescribing and use of new technology and mobile screening services to prevent ill health. It also says it will “improve hospital food alongside our wider National Food Strategy.” It makes no commitments in relation to the various obesity action plan related consultations launched by the Government since 2017, but does say the party will maintain its commitment to free school meals. It also makes finding a cure for dementia one of its “biggest collective priorities” with a commitment to doubling research funding into dementia and speeding up trials for new treatments. On farming, it says the Common Agricultural Policy will be replaced by a system based on “public money for public goods”; and in return for funding, farmers must farm in a way that safeguards high standards of animal welfare. There will be a “legal commitment to fish sustainably and a legal requirement for a plan to achieve maximum sustainable yield for each stock.” The party wants Britain to “lead the world in the quality of our food, agriculture and land management – driven by science-led, evidence-based policy.” On alcohol, the party will “review alcohol duty to ensure that our tax system is supporting British drink producers.” On animal welfare, the party says it will bring in new laws on animal sentience and “end excessively long journeys for slaughter and fattening”. The party also says it “will not compromise on our high environmental protection, animal welfare and food standards” in trade negotiations.
Labour manifesto: The Shadow Education Secretary, Angela Rayner, has announced that, if elected, a Labour Government would expand the provision of free, healthy breakfasts to all primary schools and pilot the same policy in secondary schools. The party also plans to extend free school meals (FSM) at secondary school to every child whose family is in receipt of Universal Credit. [Source: Labour Party website 5 Dec. 2019]
Sustainable Palm Oil 2018 Annual Progress Report: The UK Roundtable on Sourcing Sustainable Palm Oil’s Annual Progress Report measures the UK’s progress towards meeting the 2020 Amsterdam Commitment to source 100% sustainable palm oil within Europe
Efeca have published the UK Roundtable on Sourcing Sustainable Palm Oil’s 2018 Annual Progress Report. The report presents the overall figure for the amount of Certified Sustainable Palm Oil (CSPO) imported into the UK via the four main UK refineries, as well as the remaining volume that is uncertified entering the UK. The report shows that overall, 2018 UK purchases of palm oil supported by Mass Balance, Segregated, and Identity Preserved RSPO certification (not including RSPO credits) have increased by 83% (268, 668 mt) since 2009, when total purchases represented 55,000 mt. According to FEDIOL figures, the 2018 volume accounted for by imports of Identity Preserved, Segregated and Mass Balance CSPO totals 323,688 mt (excluding PalmTrace and derivatives and finished goods), or 77% of total palm oil imports to the UK.
While this headline figure demonstrates a significant improvement on the 2009 baseline and a 2% increase from last year, it also demonstrates that work remains to be done on reaching 100% sourcing. The remaining 23% of conventional palm oil indicates that some sectors are lagging behind on sourcing CSPO or possibly not reporting on what they are buying. In addition, ingredients manufacturers, consumer goods manufacturers and retailers may be purchasing uncertified oil in a wide range of products (both food and non-food) as fractions and derivatives or finished goods directly from refiners in Europe or internationally.
The UK RT SSPO can make an important contribution to the efforts of the private sector across Europe and further afield to remove deforestation from their supply chains, and to ensure fully sustainable palm oil supply chains by 2020. It will continue to report annually on progress in the UK. As a relatively small player in the global market, the UK can create systemic change for sustainably produced and consumed palm oil by working collectively on a global basis.