FDF study revealing weak business confidence offers critical warning

The latest study from the Food and Drink Federation on the state of the sector’s health in the UK can come as little surprise with its results showing confidence levels at -64 per cent.

While British firms within confectionery, snacks and bakery markets have gained some considerable renown for their resilience, determination and creativity over the years, market conditions have been particularly punishing in recent times.

As our title has previously published, even experienced operators working as artisans in London and other areas of the country have found business rates prohibitively expensive, leading to store closures, or reducing of operations given the sheer level of increases upon doing business, with energy and logistics costs all spiraling.

Linked to this, there has been an extremely high level of inflation associated with the food and drink world – with confectionery among the hardest hit – including some chocolate ranges seeing retail prices rise by upwards of 20%, meaning that many shoppers have cut back on purchases, including premium confectionery, as household budgets continue to feel the pain of comparative economic stagnation.

As for the FDF study itself, this comes in the wake of the government’s introduction of higher national insurance payments to employees, which has continued to bite, leading to a situation where nationally, we now have over one million young people not in work or training in the UK. This is not a sustainable situation. 

In response, the government has just put forward plans for a temporary tariff plan that aims to ease pressures on consumers with import taxes for cocoa related products, as well as other core ingredients, being relaxed  – which on the surface of it, may seem a welcome measure, but there is a flip side to this situation. As Fairtrade Foundation observed – removing tariffs may well have the unintended issue of unsettling financial agreements for farmers in producing nations, including in West Africa, where farmer wages have already taken a huge nosedive in the past six months, leaving the sector even more vulnerable than ever before.

As for the UK itself, while it’s not a popular strand of conversation within government, it has been widely acknowledged that the country has lost out on trade to the tune of many billions over the past few years since Brexit-related red tape has been put in place, making trade with the continent far more difficult than it previously was. 

This has seen confectionery exports to Europe drop notably as a consequence, though there may be some hope on the horizon in relation to government hopes of removing some of those EU border controls in the latest round of discussions with European counterparts. But that remains a deal that could well go either way at this point, so all eyes will be trained on whether such concessions can be secured.

Neill Barston, editor, Confectionery Production magazine

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