Chief Executive's Weekly News for 27th January 2020

CBI Economic Global outlook: a mild upturn is in prospect The global economic climate proved challenging for UK firms last year, as a combination of decelerating economic growth in major markets, demand shocks in some industrial sectors and the escalating trade war between the US and China led to a downturn in global manufacturing, investment and trade. At the start of 2020 there are tentative signs that the slowdown is bottoming out, and the recent thawing in US-China tensions gives some more glimmers of hope. But global growth is likely to remain subdued this year and as trade risks diminish, geopolitical risks are rising.

Key highlights from our economic forecast:

In the eurozone, GDP growth slowed steadily through 2019 to a little above 1% in Q3, though this was marked by increased divergence.
Germany’s economy buckled given the pressure on its large manufacturing sector, but the less-internationally exposed French economy proved more resilient.
Further afield, US growth has slipped from close to 3% in 2018 to nearer 2% in Q3, as President Trump’s fiscal boost faded and uncertainty fuelled by the trade war with China spilled over into a sharp weakening of corporate investment.
Meanwhile, China has continued to slow, with growth slipping closer towards the 6% threshold, reflecting a cautious policy stance and a collapse in bilateral trade with the US.
Indeed, the US trade war with China has contributed to a slowdown in world trade that is unprecedented outside a global recession.

Barclays: Business optimism has enhanced for UK manufacturers

According to CBI industrial trends survey, business optimism & investment intentions have enhanced significantly in the three-months to jan’20, with optimism growing at the fastest pace since apr’14.

A significant proportion of the UK manufacturers are expecting to authorise capital expenditure in plants and machinery in an effort to increase capacity and output, following five consecutive quarters of falling intentions.

The share of manufacturing businesses citing expanding capacity as a driver of planned capital expenditure was recorded at 57% in a survey.

Similarly, business optimism saw resilient growth in the three months to jan’20 which increased to +23% from -44%.

Brexit: The most significant development this week has been the Government’s success in securing Parliamentary approval of its EU Withdrawal Agreement Bill. The UK will now legally leave the EU on 31 January 2020. After more than 3 years of often bitter debate inside and outside Parliament, EU ratification of the Withdrawal Agreement will complete this process. A considerable amount of Government resource will now turn to trade negotiations with the EU, the USA and other countries, which will have vital implications for the UK food industry, agriculture and horticulture, as well as our health.

WRAP: regularly calculates the amount of food waste produced in the UK and identifies any factors that might increase it. A new report launched today, looks at household food waste collections by local authorities to try and determine whether targeted collection schemes can reduce food waste arisings.
After taking into account social deprivation, time, and other factors previously reported to influence household food waste arisings, separate food waste collections were significantly associated with lower total food waste arisings.
WRAP recommends that further research would be beneficial in order to secure a more definitive conclusion. The significance of food waste collection type in this study suggests that future work should continue to use narrow criteria to avoid noise in the data, whilst increasing the size of the data set by adding new data for future years.

CCC report on land use sparks debate on UK diet

The Committee on Climate Change (CCC) published a new report, Land use: Policies for a Net Zero UK, this week. It argues that meeting our greenhouse gas (GHG) emissions target requires a “transformation in land use across the UK” and it presents a detailed range of options to drive emissions reductions across the country. CCC Chair, Lord Deben, said that action on the part of land managers must be matched by consumer behaviour. The CCC’s objectives include reducing food waste; consumers eating 20% less lamb, beef and dairy products, which it describes as “well within current healthy eating guidelines“; and reducing our reliance on imported food. The Labour Shadow Defra Secretary, Luke Pollard, said that “many consumers are already making more sustainable choices” and “food producers and supermarkets need to step up and do their bit to reduce carbon in the food chain. That means more local, British produce, buying fruit and vegetables in season and not relying on food grown on the other side of the planet.” He added that “consumers need far better information on labelling so they can make more informed choices on sustainable eating.”

FSA contribution to National Food Strategy

The Food Standards Agency (FSA) had an interesting Board meeting on 21 January when, among other issues, it discussed the FSA’s contribution to the National Food Strategy (NFS) with Henry Dimbleby, who is leading the development of the NFS (video). The Board was also updated on the FSA’s modernising regulation programme; discussed the long-term strategy the FSA will pursue in tackling food hypersensitivity; and considered its risk analysis process in the context of the food safety decisions that will be taken post-Brexit. The FSA Board also laid down the objectives that will direct FSA input to the UK Government’s negotiations on free trade agreements, framed around ensuring that public health protection and consumer’s interests are put first.

FSA consults on food allergen guidance

The Food Standards Agency (FSA) is consulting on updates to its existing technical guidance to reflect changes to food allergen labelling legislation in England which comes into effect on 1 October 2021. The 2019 food information regulations were introduced by the Government last September after a UK-wide consultation and are supported by Wales, Scotland and Northern Ireland. Under the new rules food which is packaged on-site before a customer selects or orders it, will be required to have an ingredients list with the allergens emphasised on it. The deadline for responses to this consultation is 6 March 2020.

Wales: Consultation update:
Proposal to introduce rules for indicating the country of origin or place of provenance of the primary ingredient of a food
Read more: https://www.food.gov.uk/news-alerts/consultations/proposal-to-introduce-rules-for-indicating-the-country-of-origin-or-place-of-provenance-of-the-primary-ingredient-of-a-food

The smarter rules for safer food (SRSF) package is a set of EU regulations for the protection against animal disease and plant pests. The package will modernise, simplify and improve existing health and safety standards for the agri-food chain. It will take a risk-based approach to animal, plant and public health protection, introducing more efficient pest and disease control measures.

The package includes 3 principal EU regulations:

Official Controls Regulation (EU) 2017/625: how controls across the agri-food chain will be monitored and enforced – applies from 14 December 2019
Plant Health Regulation (EU) 2016/2031: controls for protecting plants from disease and pests – applies from 14 December 2019
Animal Health Regulation (EU) 2016/429: a framework for the principles of European animal health – applies from 21 April 2021

Further information on SRSF can be found on GOV.UK

To help you better understand the SRSF regulations and help prepare for the introduction of Traces NT we are running a series of webinars and face to face workshops this week (starting with a webinar today).

Full details of the events and registration can be found in the links below:

Wednesday – Workshop, London – https://www.eventbrite.co.uk/e/traces-nt-and-srsf-workshop-tickets-89979020673
Thursday – Workshop, York – https://www.eventbrite.co.uk/e/traces-nt-and-srsf-workshop-tickets-89971030775

Friday – Webinar – https://www.eventbrite.co.uk/e/traces-nt-and-srsf-webinar-tickets-90153685099