- The Food and Drink Federation has released its latest business confidence survey, which has revealed some of the biggest worries facing companies within the industry
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Overall, economic uncertainty has led to confidence falling 21 per cent between Q1 and Q3 in 2018.
While 71 per cent of the businesses polled have experienced higher packaging costs, 79 per cent reported that the biggest impact on their business has been caused by the rising cost of ingredients.
Market consolidation – for example the merging of Sainsbury’s and Asda, and the takeover of Booker by Tesco – is one of the three biggest concerns of the UK’s SMEs, which make up 97 per cent of the food and drink marketing sector.
38 per cent of the food and drink manufacturers surveyed are experiencing an increase in costs due to businesses stockpiling due to the potential of a ‘no-deal’ Brexit.
Meanwhile, just under 60 per cent of businesses believed that investment across the UK’s economy would fall in 2019, and 96 per cent expect to see higher input prices.
Ian Wright CBE, chief executive of FDF said, “These results tell us just how seriously the food and drink industry, the UK’s largest manufacturing sector, takes a ‘no-deal’ Brexit. It is a grisly prospect to which we edge closer every passing day.
“Yesterday’s announcement from the Chancellor - with measures to support productivity, exports, enterprise and investment - offers some respite for our SME food and drink manufacturers.
“But there is significantly increased worry across the sector following the announcement of the Chancellor’s new tax on plastic packaging. This will undoubtedly place many more financial burdens on UK food and drink manufacturers - that loads on cost at a time when just under three-quarters of our members report that their packaging costs are increasing. The storm clouds are gathering.”