FOB Chief Executives Weekly News for 17th February 2020

Barclays GDP Update

It is forecasted that the headline gross domestic products (GDP) for q4’19 would have no change, which is line with market expectation. The expenditure breakdown indicates household consumption and investment slowdown severely in q4’19. However, it is forecasted to be 1.4% in 2019, when compared to 1.3% in previous year.

In q4’19, government spending offset weakness in other areas of the economy as public spending increased by 2.1% (q-o-q). Public investment and higher current spending was in line with no-deal contingency spending as well as possibly poor budgetary control going into the election campaign.

GDP is expected to be at 0.3% for q1’20, this downside revision is offset by upside revisions to 2019, leaving 2020 forecast unchanged at 1.0% (y-o-y).

Barclays Coronavirus Update: the hit to the global economy will be worse than SARS.

According to IHS Markit, coronavirus outbreak will be worse for the global economy than the 2003 Severe Acute Respiratory Syndrome (SARS) epidemic.

While both outbreaks originated in China, nearly two decades separate the SARS outbreak from the coronavirus outbreak. At the time of SARS, China was the sixth largest economy, accounted for only 4.2% of world GDP. China is now the world’s second largest economy, accounting for 16.3% of world GDP.

If the current and unprecedented confinement measures in China stay in place until the end of feb’20, and are lifted progressively beginning in mar’20, the resulting economic impact will be concentrated in the first half of 2020. This will result in reduction of global real GDP of 0.8 % in q1’20 and 0.5% in q2’20.

In this scenario, the coronavirus and resulting measures will reduce global real GDP by 0.4% in 2020. On the other hand, if confinement measures begin to lift on 10th feb’20, the impact on global GDP will be more limited, resulting in a 0.1% reduction in global GDP growth in 2020 and 0.4% reduction in China’s annual growth.

Food waste declines in the UK
The latest figures from WRAP show that excellent progress is being made in reducing food waste, with a 7% reduction per person in the last three years. The new data shows that there has been a half a million tonne reduction in total UK food waste in just three years – enough to fill the Royal Albert Hall ten times.

The decrease in household food waste can be attributed to a range of factors including heightened public awareness through WRAP’s Love Food Hate Waste campaign, clearer labelling on food packaging, and more local authorities offering residents separate food waste collections in line with WRAP’s Framework for More Consistent Collections – which is helping to raise awareness within the home.
Find out more

CBI EU and International Update: In a speech at the Atlantic Council in Washington last week Carolyn set out the CBI’s vision for a UK-US Trade deal, outlining the need for a deal that delivers for business and is compatible with a close trading relationship with the EU. The CBI is well placed to influence on both sides of the Atlantic and we will be publishing a paper outlining business priorities for the trade deal later this month.

The government took another a big step towards launching an independent trade policy with the announcement that it would consult on a new UK Global Tariff for imports. This will replace the present EU system of import tariffs at the end of transition. The CBI has argued consistently for business to have a full say on UK’s future import tariffs and is encouraging members to shape the CBI’s submission to the consultation by 5 March. 

The government also announced plans on 10 February to create ‘up to ten’ Freeports – which aim to boost location by creating special economic zones with special tariff and tax privileges. Once the 10-week consultation is complete, the Government will invite sea, air and rail ports to bid for Freeport status on a competitive basis.

Meanwhile, with just weeks to go until formal negotiations between the UK and the EU begin, both sides published their opening mandates last week. The CBI was quick to provide members with our analysis of what this means for business. 

The CBI was clear in our response to government that, with business optimism returning, the right signals about the UK’s future relationship with the EU can turn that confidence into investment. The Prime Minister’s commitment to global free trade and maintaining high standards through a thriving relationship with the EU will help. But the challenge will be to ensure that business confidence does not get caught in the crossfire of a tough, public negotiation. Talk of a bare bones deal risks pausing investment, so the government must take every opportunity to show ambition throughout the negotiations. This will require building a deal with deep mutual market access while keeping business insight at the heart of their decisions.

GCA Launches Annual Survey

The Groceries Code Adjudicator (GCA) launched her annual survey on 4 February 2020, 10 years to the day since the Groceries Supply Code of Practice (the Code) came into force.

The survey has played a vital role in helping the GCA to achieve progress for suppliers, demonstrating where retailers’ efforts have improved Code compliance and identifying areas for them to make improvements. It is an opportunity for suppliers to tell the GCA what Code issues they are facing and whether the regulated retailers are treating them fairly and lawfully.

This year the survey – the seventh carried out by Christine Tacon – includes Home Bargains, which was designated by the Competition and Markets Authority in September last year. Suppliers can complete the survey at www.yougov.com/GCA.

Christine Tacon said: “The annual survey is the best way for the GCA to understand what issues suppliers are experiencing with the retailers and it is a powerful indicator of the state of relations in the sector. The retailers themselves use the results to help them pinpoint the issues they need to work on.

“I have tracked retailer behaviour through an annual survey since my first year in the role and seen continued progress. The 2019 survey results were the best ever with only four out of ten suppliers reporting having experienced a Code-related issue in the last twelve months – down from a high of eight out of ten in 2014 – but I am still pushing for further improvement. I would like to see if that trend has continued against a challenging retail background and since three additional retailers joined the original ten.

“Since my appointment as the UK’s first Groceries Code Adjudicator I have seen great changes in the relationship between the major retailers I regulate and their direct suppliers. This is my last annual survey as the GCA and, as always, its value comes from the significant number of suppliers who take part. I need all sectors and sizes of groceries suppliers to complete my survey so please take the time to fill it in.”

The independent polling company YouGov runs the survey on behalf of the GCA so suppliers can be confident the information they provide is treated in complete confidence. YouGov collects and analyses the answers. The results will be announced by the GCA in its newsletter and online in June. You can register for the GCA’s newsletter here.

The survey closes on 29 March.

Health and Safety: Entries are now open to anyone working in the food or drink manufacturing industry, for the Food and Drink Health and Safety Awards 2020.

To be in with a chance of winning, submit your entry by 6 July 2020. We will accept individual or team entries.

These awards recognise innovative projects which have made a positive impact on an occupational safety and health problem in the food and drink manufacturing industry.

Winning entries will receive complimentary entry to The Food and Drink Manufacturing Health and Safety Conference. The award winners and any runners-up will be offered the opportunity to give a short presentation on their project, at the start of the second day of the conference. There are also cash prizes available for the winner and two runners-up.

Share your creative solution and inspire others to take new approaches to improve safety and health at work.  The project or solution does not have to be on a large scale – sometimes the most ingenious solutions come from small or niche problems.

Enter for free. Visit the IOSH website for full details and download the entry form.

Good luck, the closing date for entries is 6 July 2020.

FSA consults on acrylamide and furans survey

The Food Standards Agency (FSA) is commissioning a new survey to monitor the levels of acrylamide and furans in UK retail foods and is inviting views now on the survey design and how the occurrence data might be used to identify effective mitigation measures and steps to reduce levels of acrylamide and furans.  While the FSA has previously monitored the levels of acrylamide and furans in our food, as required by EU regulations; this survey is being commissioned to provide a snapshot of UK compliance rates with the benchmark levels set out in European Commission Regulation (EU) 2017/2158 and to ensure that there is sufficient data to inform on any future regulatory measures. The FSA has requested responses to this consultation by 13 March and earlier if possible.