UK Food & Drinks Trade Body Calls for Sugar Tax to be Scrapped in Light of Brexit Uncertainty

11 Jul 2016 --- The sugar tax should be put on hold in light of uncertainty caused by Brexit while many UK food and drink manufacturers "would struggle" to replace EU customers with those outside of the EU "because of different consumer tastes and limited product shelf lives," according to the director general of the UK Food and Drink Federation (FDF).

Ian Wright, the director general of the FDF, whose members include Coca-Cola and PepsiCo, has given a wide-ranging speech at the lobbying group’s annual conference, where he addressed key issues facing the food and drinks industry caused by the UK's decision to exit the European Union.

Attacking both sides in the referendum debate, Wright said: "It is clear that the Remain campaign had no 'plan B'; while the Leave campaign had no plan at all."

Members of the FDF overwhelmingly voted for the UK to stay in the EU, amid concerns over the impact leaving would have on the industry's large migrant workforce, the impact on the value of the British pound, as well as wanting to maintain access to the single market.

In his speech, Wright outlined the FDF's post-Brexit manifesto, in which he called for the continued access to EU labor- around 100,000 (25 percent) of the UK industry workforce was born in an EU country outside of the UK- and the continued access to single market.

However, it is difficult at this stage to see how the FDF’s calls for continued access to EU labor will be possible in light of the Brexit vote, in which curtailing the free movement of EU citizens into the UK was central to the Leave campaign winning the vote.

Wright pointed out that EU labor would be important in meeting the industry's need for 130,000 new skilled workers by 2024.

Wright said: “The immediate priority for those workers is to support them through this deeply unpleasant climate of 'anti-foreigner' sentiment and to provide them with speedy reassurance that their future here is absolutely secure and their contribution is valued and warmly welcomed.”

“In the medium term, our industry will require cast-iron assurances that their access to a flexible workforce, with a wide range of skills and capabilities as well as a strong work ethic, will continue."

The director general of the FDF also expressed concern about the ramifications in the post-Brexit world on food safety and labeling.

"We are in no doubt of the scale of economic risk that the Brexit vote brings with it," he added.

In light of the uncertainty around Brexit, Wright said the UK's proposed sugar tax and apprenticeships levy-a levy on UK employers to fund new apprenticeships – should be scrapped.

The sugar tax, proposed in the government’s budget earlier this year, had previously been dubbed a piece of "political theatre" by the FDF and has been attacked by the likes of Coca-Cola, which argues it unfairly singles out fizzy drinks with the tax.

Wright added: "So I believe implementation of the proposed Apprenticeships Levy and the Sugar Levy - and any other fresh burdens - should both now be put on hold.”

“We have raised serious questions about both policies. Both would, if proceeded with in their current form, add unwelcome additional burdens on hard-pressed industry at a moment of crisis."

One danger, highlighted by the FDF, is that the sugar tax could be undermined once the UK formally leaves the EU and becomes flooded with imports.

by John Reynolds