With a Conservative Parliamentary majority not seen since the 1980s and a pledge that a Boris Johnson administration would govern in the interests of an entire nation, what does the UK General Election result indicate for the food and drink sector:
Delivering Brexit – the industry will be relieved that the spectre of ‘No Deal’ Brexit on the 31st January 2020 is banished and the supply chain can organise itself accordingly. However, many in the sector appreciate that this is just another passing milestone in the Brexit saga – not the conclusion of it. While customs borders will be tested across Britain the industry will manage and mitigate those risks, a bigger headache for the sector might be political tensions between England and Scotland following the consolidation of the Scottish Nationalist Party (SNP) vote north of the border. Food and drink is a devolved responsibility and the industry will be keen to preserve a UK single market when it comes to regulatory standards.
Fostering sustainable and healthy food – while Boris might not have an appetite for imposing ‘sin’ taxes or levies, One-Nation Conservatives do not traditionally hesitate to protect children and families. With senior Cabinet Minister, Michael Gove still an influential force within the Boris administration, expect continued pace to tackle plastic within the food and drink supply chain and the championing of more sustainable sourcing and farming resulting in more healthy and nutritious produce. Meanwhile, expect Public Health England to continue to enjoy relative autonomy from central Government to pursue its regulatory framework tackling obesity over the next couple of years.
Trading relationships – the UK is only 60% self-sufficient in its food supply and this is unlikely to increase over the next Parliamentary term. The way in which our farmers will be paid to manage their land will change under UK CAP reform and the new Boris administration will champion UK farming & food values over UK farming & food volume. When it comes to trade deals, what will be interesting will be how the UK chooses to ‘trade off’ the competing interests of EU / US / Asia over the year ahead. We import large amounts of food from the EU and alignment with EU standards are held in high regard by markets like China. However, the US have been explicit in encouraging the UK to relax regulatory and non-tariff barriers of food and drink to secure a deal. Expect the industry to feature prominently in the opening salvos of trade talks over the Summer.
For many, 2019 was a year of false dawns and frustrations – 2020 will feel very different and navigating the politics of it all has never been more important for this sector to get right to ensure competitive advantage and commercial survival.
If you’d like to discuss this issue further or to find out how we can help you please do get in touch for a chat with one of the team.
Liam McCloy, EMEA Food, Beverage & Agribusiness Lead