UK industry urges future government to pay closer attention to labor pool deficits amid lagging exports

22 Nov 2019 --- The UK Food and Drink Federation (FDF) has released the Food and Drink Manufacturers’ Manifesto, calling on Britain’s next government to champion the nation’s food and drink sector, and support long-standing industry proposals to boost sector productivity. Among the listed priorities is establishing a “closest possible” UK-EU trade and regulatory partnership, while making moves to offset significant labor shortages on the homefront. An existing dearth in the national workforce is expected to be aggravated by a loss of European labor post-Brexit.

“We know the next government – of whatever political hue – will want to tackle the issues of productivity, obesity and plastic packaging. To do that successfully, it will need to work effectively with the industry and the FDF,” says Ian Wright, FDF Chief Executive.

“The food and drink manufacturing industry touches every person, every community and every constituency in the country. It’s the UK’s largest manufacturing industry. Its success is integral to the country’s wider economic prosperity, with an impact far beyond London and the South East,” he asserts.

FDF’s manifesto outlines five key policies the next government must implement to ensure the industry continues to “thrive, supporting the considerable contribution it makes socially, culturally and economically to communities throughout the country.” They are:

• Prioritize the closest possible UK-EU trade and regulatory relationship.
• Work with industry to develop home-grown talent and boost skills to equip the industry for its future.
• Support efforts to make food production and consumption more environmentally sustainable, and help tackle climate change.
• Tackle obesity and other dietary concerns through a holistic, evidence-based partnership which reflects real lifestyles.
• Drive productivity with the Food and Drink Sector Council (FDSC) the leading vehicle for partnership with government.

Labor shortages are likely to worsen post-Brexit, notes the FDF.The FDF stresses that the food and drink sector has a significant impact on the UK economy, contributing £121 billion (US$156 billion) to national Gross Value Added and employing over four million people (14 percent of the national workforce), spread across every region of the UK.

In October, the challenges caused by a shrinking labor supply across the UK food supply chain were underscored by the FDSC. The council’s report highlights the growing skills shortage in Britain since the Brexit referendum over three years ago and calls for urgent action to remedy gaps in certain sectors. This statement was issued as net migration is forecast to fall in the coming years, which will further impact the nation’s food supply.

“Labor shortages are likely to worsen post-Brexit, due in part to lower net migration. The issue around labor shortages is heightened by the fact that migrants tend to fall in the working age category,” an FDF spokesperson tells FoodIngredientsFirst.

Net workforce growth in UK food and drink since 2012 has been driven by EU nationals. “The challenges we face will be further exacerbated if our future immigration system doesn’t allow businesses to access the workers they need. Over a quarter of our workforce are EU nationals, operating at all skills levels.”

In October, the EU signed off on a third extension of the Brexit deadline, leaving UK industry representatives simmering over “wasted preparations.” Contingency planning for an indefinite outcome has cost British businesses “hundreds of millions,” siphoned from core business operations. The Brexit “flextension” allows the UK government to leave the bloc at any given point in time until January 31, 2020, although it remains unclear about precisely what the next move will be.

Representatives of the EU agri-food chain have rallied for a Brexit deal that includes a free trade agreement (FTA).“Untapped potential” for UK exports
The FDF further highlights a need to ramp up export activity, stating, “With just one in five food and drink businesses exporting, there remains much untapped potential within the sector. The next government must work with industry to create a dedicated future trade policy that builds on this fantastic opportunity.”

The EU has adjunctly rallied for a free trade agreement with the UK. Representatives of the European agri-food chain including Copa-Cogeca, CELCAA and FoodDrinkEurope have openly endorsed a Brexit deal that includes a Free Trade Agreement (FTA) with zero tariffs and quantitative restrictions between the EU and the UK.

“Proximity is key for trade in limited shelf life products and for just-in-time supply chains. That is why more than two thirds of UK trade in food and drink is with the EU27. The continued ability to trade ingredients and finished goods without friction and costly regulatory barriers is vital to our future success,” asserts the FDF.

“The EU market is by far the largest and most important to UK food and drink manufacturers, for both imports and exports. In particular, food and drink ties between Great Britain, Northern Ireland and the Republic of Ireland are extremely tightly woven. Continued seamless trade is critical. Our access to the trade agreements negotiated by the EU with third countries has been crucial to food and drink’s export success,” it further highlights.

New opportunities for UK meat exports lay on the Eastern horizon. The two-decade ban that prevented British beef exports to China finally came to an end earlier this year. In June, Chinese government officials signed a protocol agreement to ship beef from the UK for the first time in 20 years, marking the end of a ban following the bovine spongiform encephalopathy (BSE) outbreak. Approval has been granted for full access in a beef trade deal estimated to be worth around £230 million (US$299 million) over the first five years.

In October, FoodIngredientsFirst met with representatives of the US poultry sector on the showfloor of Anuga 2019, in Cologne, Germany. The UK’s departure from strict EU legislation regarding poultry could present lucrative trade opportunities for US exports, according to the USA Poultry and Egg Export Council. However, overcoming negative perceptions surrounding chlorinated chicken and its usage rate will be crucial to succeeding.

“Strategic partnerships with government, including the FDSC, have been long overdue but are finally delivering. The next administration must seize upon this once in a generation opportunity to develop these relationships and build the food and drink industry our people demand and deserve,” concludes Wright.

By Benjamin Ferrer