Dear All,
Detailed below is the Weekly News and Covid Update for 19th November.
Apologies a little late!
Have a good week.
Gordon Polson
Chief Executive – Federation of Bakers Ltd
FOB Chief Executive’s Weekly News for 19th October 2020
IFS published report on Brexit’s economic impact
The report published by the Institute for Fiscal Studies (IFS), indicated the economic setback that Britain’s EU trade relationship will suffer when brexit goes live at the end of 2020. The transition period that is keeping the UK closely tied to the bloc, expires on 31st dec’20.
The report highlighted:
GDP growth to be 2.1% lower in 2021 than if the UK remained closer to the EU, staying in its single market and customs union.
new trade deal will mean new barriers that effectively make UK-EU trade 9% more costly for firms, or 13% more costly if no deal is struck.
an expected decline in exports from new trade barriers will leave transport, distributed services and manufacturing most exposed, given small cash buffers, lower preparedness and high EU trade flows.
manufacturing and business services firms working towards EU trade will suffer write-off to capacity with some expertise and capital might become surplus to requirements.
hard-hit sectors to face small but significant hit to employment, and workers with strong sector-specific skills but few formal qualifications may struggle to find work.
barriers to EU imports are expected to result in increased prices, with inflation expected at 3.5$ in 2021 even if a deal is reached.
exposed sectors like manufacturing may have to face a tightening in credit similar to one seen ahead of approaching brexit deadlines in 2019.
ZEW survey on eurozone outlook, oct’20
According to a survey by the Leibniz Centre for European Economic Research (ZEW), respondents flagged covid-19 and uncertainty about the outcomes of brexit trade talks and the US election for more negative views on Europe’s prospects.
The ZEW index decreased from 73.9 in sep’20 to 52.3 in oct’20, although the index measuring investors’ assessments of the current situation increased from -80.9 in sep’20 to -76.6 in oct’20.
Improvement in efficiencies was reported across the private sector of the three eurozone nations for which productivity data are published. Germany recorded the highest increase in productivity, primarily due to an expansion in factory production. In sep’20, productivity pmi for Germany stood highest at 56.7, followed by France at 52.2 and Italy at 51.6.
Quarterly productivity trends improved across the private sectors of Germany, France and Italy during q3’20, following a decline in q2’20.
Merger, acquisition and overseas investment declined in UK food industry
According to Oghma partners, overall deal value in the UK food industry between may’20 and aug’20 stood at £220m, compared to £1.2bn in the same period in 2019. It stated that the volume of deals had also significantly declined from 37 in 2019 to 15 in 2020.
The company stated that it was not surprised by the situation, as it continued to witness challenging conditions for M&A within the UK food and beverage market. The proportion of investment from overseas had also declined compared to the period between may’19 and aug’19. Transactions with an overseas buyer had accounted for 20% of total deal volume between may’20 and aug’20, compared to 32.4% for same period in 2019.
Oghma partners expected the number of investments from overseas to remain low in the short term, due to covid-19 related travel restrictions and the continued uncertainty surrounding the UK’s brexit deal negotiations.
British standards compromised in agriculture bill vote
The amendments, which included giving the new trade and agriculture commission the power to scrutinise any future trade deals, were defeated by 53 votes despite calls from organisations and charities to protect British standards.
The move comes after Victoria Prentis, farming minister, stated that the government was absolutely committed to high standards. Government had also stated that the EU rules, which ban the importing of chlorine-washed chicken and other products, such as hormone-treated beef, will be written into UK law after the post-brexit transition period ends on the 31st dec’20.
Government secured critical freight flows as UK nears end of transition period
The government has signed agreements with four ferry operators to provide capacity equivalent to over 3,000 heavy goods vehicles (hgvs) per week, mitigating the risk of disruption as the UK and EU adjust to new border processes at the end of the transition period.
The contracts with Brittany Ferries, DFDS, P&O and Stena, collectively worth £77.6m, will focus on nine routes serving eight ports in areas less likely to experience disruption. These include Felixstowe, Harwich, Hull, Newhaven, Poole, Portsmouth, Teesport and Tilbury.
Grant Shapps, transport secretary, stated that as the transition period comes to an end, they are putting the necessary measures in place to safeguard the smooth and successful flow of freight. He added that securing these contracts ensures that irrespective of the outcome of the negotiations, lifesaving medical supplies and other critical goods can continue to enter the UK from the moment they leave the EU.
UK Government Brexit Guidance: Detailed below are links to the latest guidance on labelling in GB, not Northern Ireland, that’s still to come, and additionally updated guidance on health and identification marks from 1 January 2021.
Gov.uk labelling guidance has been updated. This revised guidance (https://www.gov.uk/guidance/food-labelling-changes-after-brexit) covers general food information to consumer requirements; use of FBO addresses; organic labelling; country of origin labelling, including for minced meat, beef and veal, mixed fruit and vegetables, blends of honey and olive oil, and eggs; and use of geographical indications.
This page also links to updated guidance on health and identification marks from 1 January 2021 which has also been published today by the Food Standards Agency here: https://www.food.gov.uk/business-guidance/guidance-on-health-and-identification-marks-that-applies-from-1-january-2021.
FSS research: more consumers worried about post 2020 standards: New consumer research, carried out by Food Standards Scotland (FSS), which surveyed over 1000 people living in Scotland in early September, found that 77% of those surveyed were either “quite or very concerned” about a drop in food quality and standards at the end of the Brexit transition period, an increase of 8% on the results of similar research in January.
Updated Scottish Guiidance on Face Coverings
The updated Scottish Government legislation which includes the requirement to wear face coverings in ‘communal areas’ in indoor workplaces in Scotland has been published.
Communal areas are defined as: “an area where persons mingle or gather, such as— passageways, stairs, lifts, staff rooms, training rooms, changing rooms, or entrances.”
There is also a small change which makes workplace canteens subject to the same rules on face masks (where except when eating)
This includes factories but crucially exemptions have been made (at FDF’s request) for:
- n) Undertaking food handling tasks, to avoid risk to the hygiene or safety of food arising from or in connection with the wearing of a face covering, or
- o) Undertaking tasks in the course of their employment, where the wearing of a face covering would cause a material risk of harm.
Interestingly there is also an exemption for social distancing:
- d) In an area where there are measures in place to keep that person separated from any other person by a
(i) Partition, or
(ii) Distance of at least two metres.
To note the intent is that this is a personal rather than corporate responsibility, but we suggest members to consider how they best support their teams.
We would advise members unless it is not possible due to food safety reasons, or social distancing is in place, to wear a face covering.
International Whole Grain Day: Please see below for further details of International Whole Grain Day and the programme that the Whole Grain Initiative has put together to celebrate the day.
Registration is free and there will also be the launch of the WGI’s campaign video which will feature the UK representative, Prof. Louise Dye who talks about her work on nutrition and cognitive performance, and why increasing whole grain intakes can help to improve health, wellbeing and reduce dietary related diseases.
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