UK’s Food and Drink Federation calls for for multi-billion government sector investment

The UK’s Food and Drink Federation (FDF), has made an urgent plea to government in setting an ambitious strategy to double investment in the sector to £12 billion, as the overall industry seeks to enhance exports, reports Neill Barston.

As the key trade organisation noted, businesses operating within the sector, including confectionery, snacks and bakery companies that are among its core members, remain vital to the British economy. 

The sector body’s call for more government-led investment has been backed by major businesses within the region’s sweets and snacking segments, including Mondelēz International, Nestlé UK and Premier Foods among many other leading brands.

Notably, the trade organisation’s latest call on the Labour administration comes as latest industry surveys found sector confidence had dropped 60% in quarter three of 2025, with companies facing elevated national insurance and energy costs, as well as notably weaker consumer demand.

This was mirrored by the latest national statistics on the performance of the nation’s economy, which was found to have grown just 0.1% in the last quarter, below general projections.

Furthermore, as previously reported by our title, figures revealed earlier this year showed that Brexit, combining with other factors including the impact of the pandemic, has meant that the UK’s overseas trade is down around 20% compared to pre covid levels experienced in 2019.

For its part the FDF is looking to the government in a new competitiveness strategy spanning the next decade to help drive growth across Britain, to help grow exports in fulfilling potential that would see them potentially rise to around £35 billion.

It is calling for national level assistance in a bid to make Britain a hub for healthier food options, as well as research and development, which has traditionally been an area of core strength for the region.

As the industry body noted, that while UK’s 12,000 manufacturers are considered part of the backbone of our economy, they are also facing significant challenges. 

Beyond the major tests of rising costs, there are also regulatory pressures and uncertainty, as increasing competition from abroad, as well as the introduction of US tariffs on exports (levied at 10% on the UK), which are also having an impact on exporting operations.

According to the FDF, it is seeking the government to help double investment, which it said would help generate over £50bn in gross value-added (GVA) for the UK economy by unlocking a £14bn opportunity in technology adoption. 

In its estimation, this in tun would contribute to a 50% reduction in emissions across the agrifood supply chain. It also asserted that this would help drive investment in the circular economy, as well as help promote healthier diets, increase sustainable production and harness new technology.

The FDF has set out its vision in an annual investment summit, which highlighted that creating a strong government-industry partnership can unlock growth and investment.

From promoting British exports and strengthening supply chain resilience, to supporting investment in healthier products and innovative ingredients, there’s a big opportunity for UK food and drink to lead on the global stage.

Among specific measures that the FDF believed should be addressed are: Broadening R&D tax credit eligibility to include healthier product innovation, 
plus relaxing outdated and restrictive import rules that stop food companies from bringing in food samples for research and development.

It also highlighted a need for opening up existing funding in robotics and technology so manufacturers can access it as well, and matching the devolved nations’ export support and promotion to help small businesses sell their products abroad.

In addition, the organisation also believed there was greater scope for offering tax relief to help scale-up innovation in cutting-edge precision fermentation, which is creating the next generation of ingredients.

Moreover, it believed that upskilling workforces was also of critical importance, which it said was critical to the manufacturing industry, through short courses that could be financed by the Growth and Skills levy.

Karen Betts, Chief Executive, The Food and Drink Federation (FDF), commented on its strategy and plea to government.

She said: “Food and drink manufacturing is the backbone of the UK’s ‘everyday economy’. We contribute £37 billion to the economy, employ half a million people, and export nearly £25 billion of British products loved around the world.

“But our industry can and should do so much more. We need to grow our investment in technology, environmental sustainability, and healthier products, to better serve the UK’s growing population and maintain our competitiveness. But to do that, we need a stronger partnership with the whole of government, with clear, agreed aims, which create the conditions and the confidence for companies to invest.

“Our companies believe in the UK as a great place to do business. But right now there’s work to be done if we want the UK to be the best place in the world to start, grow, and invest in food manufacturing. Our ten-year ambition lays down a challenge which is bold and achievable, will unlock investment and deliver prosperity for communities right across the UK.”

In response, the Secretary of State for the Environment, Emma Reynolds, acknowledged that the overall sector contributed  £37 billion to the UK economy, employing nearly 500,000 people, which she said the government was continuing to provide backing for. 

She concluded: “We’ve launched our Good Food Cycle in partnership with industry to create the conditions for the food sector to thrive and grow sustainably, including investment in innovation and productivity, and are negotiating an SPS agreement with the EU to cut red tape and costs.

“Kickstarting growth is the government’s number one mission, and we’re determined to make the UK the best place in Europe to make and export food and drink.”