FOB Chief Executive’s Weekly News for 2nd December 2019

Barclays Economic Update: UK inflation rate declined to near three-year low

The consumer price inflation in the UK declined to 1.5% (y-o-y) in oct’19 from 1.7% in the previous month, which was the lowest rate since nov’16.

Prices increased at a slower rate for housing, water, electricity, gas and other fuels. This is primarily because regulator’s tariff cap resulted in a decline in electricity and gas cost, recreation and culture, food and non-alcoholic beverages and furniture, household equipment & maintenance.

Meanwhile, inflation rate for restaurants and hotels stood stable at 3.2%, while prices increased at a faster rate for transport and miscellaneous goods & services. Clothing and footwear costs increased by 0.5% as compared to a decline of 1% in sep’19.

On a monthly basis, consumer prices declined by 0.2% as compared to market consensus of a 0.1% decline. There were decreases in cost of housing, water, electricity, gas and other fuels, furniture, household equipment and maintenance and food & non-alcoholic beverages. However, price for recreation & cultural activities and clothing & footwear articles increased during the same period.

UK food firms lagging on workplace diversity

The diversity in food and grocery report identified that 84% of companies in the food and grocery industry stated that they were performing better as compared to five year ago. However, 45% of businesses have adopted a co-ordinated strategy on the topic. Despite a genuine desire to do more across the industry, there was a reluctance to talk more openly about diversity and inclusion, in case businesses were seen to be behind other industries.

The study also identified that the median gender pay gap within the food and grocery industry was lower than the UK economy as a whole. However, less than 10% of companies surveyed were prepared for ethnicity pay gap reporting if it was introduced in the coming years. Additionally, an average of 27.6% of board roles were occupied by women. At executive committee level, this declined to 22.2%, while 35.9% of direct reports into the executive committee were women. Compared with the latest Hampton-Alexander review figures, food and grocery was ahead of the ftse 350 cross-industry average at the executive committee and direct reports levels. However, it was unlikely to reach the Hampton-Alexander target of 33% women by the end of 2020.

Nutri-Score: On 28 November 2019, Dutch State Secretary for Health announced the Dutch Government’s intention to recommend the use of Nutri-Score as Front of Pack (FoP) nutrition labelling in the Netherlands as of 2021.
The announcement was made on the basis of an analysis by RIVM (National Institute for Public Health and Environment) and Voedingscentrum (The Netherlands Nutrition Centre) as well as consumer research commissioned by the Dutch Ministry of Health. This follows a similar announcement by the German government and increased use of Nutri-Score across Europe including France and its introduction in several European countries by Nestle.

Soft Drinks Industry Levy: HMRC has published statistics on receipts, liabilities and volume for the Soft Drinks Industry Levy. Provisional year to date receipts so far for April 2019 to October 2019 are £251 million in net liabilities.

The European Council Appoints New Commission: The European Parliament has voted in favour of the new European Commission under the Presidency of Ursula von der Leyen. The commission was approved – with 461 votes in favour, 157 against and 89 abstentions. A total of 707 MEPs voted. The UK is not on the list, as no candidate was put forward. View the list in full