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Please get in touch via info@foodanddrink.scot if you have a specific question or concern.

Key Issues Update - Friday 8 October

Labour shortages – problems not easing, Government solutions not enough

The universal concern being expressed across the food and drink supply chain on the shortage of labour continues to be a top focus for us. In response to mounting pressure from the haulage and food industries the UK Government announced on 25 September that they would grant up to 10,500 temporary visas to ease supply chain pressures, with 5,000 allocated for HGV drivers and 5,500 allocated for the poultry sector. Yesterday the Government published guidance on the scheme rules, eligibility and operation.

All arrangements must be facilitated through four nominated scheme operators. Applications for the poultry sector must be made by 15 November and visas will expire on 31 December. Applications for HGV drivers must be made by 1 December and will expire on 28 February 2022. Whilst this development is welcome, and for the first time signals the Government’s recognition of the problem, the intervention does not go nearly far enough in addressing the scale of the challenge across the industry beyond the poultry sector. It is also highly unlikely that EU workers are going to up-route themselves for a visa lasting a matter of weeks.

Over the past week we have continued to put pressure on UK Ministers to go further. We have written to Stephen Barclay, the Cabinet Office Minister tasked by the Prime Minister to find solutions to the supply chain challenges, to urge further action and, only yesterday, we met with the Scotland Office Minister Iain Stewart to reinforce the extent of the problem. We have also met again with Mairi Gougeon, the Scottish Government Cabinet Secretary. We understand there may be further discussions next week amongst UK Ministers on possible further measures but we have no further detail at this point. Even if we do see further flexibilities emerging over the coming weeks it will be too little too late for the important festive trading period, despite all the warnings the Government has received over the past four months. Nevertheless, we will keep pressing the case for action but, in the meantime, please get in touch if you want to share any experiences from your business – real life examples always helps strengthen our case.

CO2 market problems continue

Whilst the UK Government committed three weeks support for running CF Industries main fertiliser plant, that timeframe is now rapidly coming to an end. What will happen commercially after this period is unclear. What we do know is that despite the main Billingham plant getting up and running again, deliveries of CO2 in Scotland have remained patchy and unpredictable. We have been in discussion with Scottish Government on this and, helpfully, Cabinet Secretary Mairi Gougeon has made representations to Defra on our behalf around ensuring equity in supplies. But we continue to get reports of partial deliveries to Scottish customers, no future commitment to deliveries and increasing price/surcharges. We will continue discussing this with Government so please share your own experience with us. Additionally, discussions have started on developing alternative sources of CO2, to trying better manage the clear risks within this market.

Good Food Nation Bill introduced

Yesterday the Scottish Government introduced The Good Food Nation (Scotland) Bill into the Scottish Parliament – details of the Bill can be found here. The Bill has been subject to much debate and consultation over the past four years, with previous plans to introduce legislation in the last Parliamentary session put on hold due to the pandemic. However, the Scottish Government committed to bring back the Bill during this Parliamentary session and confirmed in the recent Programme for Government that it would be introduced this year.

The Bill is fairly narrow in its focus, essentially putting a duty on Scottish Ministers and other public sector bodies to produce ‘good food’ plans, set out how they will deliver those plans through their policies, and how they will measure their success. At its heart, it’s about the public sector showing leadership around good food and promoting a culture of good quality, local produced food and drink, hopefully creating more opportunities for local suppliers. The Bill will now begin its passage through Parliament, potentially concluding by the Summer 2022. During this time there will likely be specific issues that emerge so we will keep you informed accordingly.

Key issues update - Friday 24 September

Labour shortages – big shift in EU worker visas coming?

The universal concern being expressed across the food and drink supply chain on the shortage of labour has been a top focus for us over the last six weeks. There are some signs this afternoon that the UK Government may finally shift on providing visas for EU workers, after representations from Scotland Food & Drink partners and dozens of other business organisations across the UK. It’s been a month since we and a number of trade bodies wrote to the Home Secretary at the UK Government seeking urgent solutions, in particularly through the introduction of a temporary visa for EU and other international workers. We have also now written to the Secretary of State for Scotland, Alister Jack, on the issue and, only yesterday, we met with the new UK Government International Trade Secretary, Anne-Marie Trevelyan, and reinforced the extent of the problem. The huge question is whether a move now to provide more visas for EU workers (if it is announced) is going to be enough to put a dent in the problem. Any changes could be through an extension to the Seasonal Agricultural Workers Scheme. We will share more detail through our social media channels if they emerge later.

CO2 shortage averted, for now

The latest scare for business was the prospect of a shortage of CO2 which is widely used across the industry and is critical for carbonating drinks, stunning animals for slaughter, and packaging and transporting fresh food. The majority of the CO2 in the UK, which is a by-product of fertiliser production, is produced in two main plants in Teesside and Cheshire but those plants had ceased production last weekend due to significant rises in the wholesale gas price. The consequence was a 60% reduction of the UK’s food-grade carbon dioxide supply threatening to cause major disruption across the food and drink supply chain and compounding an already difficult operating environment. Thankfully, the shortage has been averted for now after the UK Government intervened and reached an agreement with the plants owners, CF Industries, to essentially subsidise the increased operating costs. Whilst this intervention was welcome it does only cover the next three weeks and we are likely to see significant increases in the cost of CO2 for businesses. Clearly this supply chain remains very fragile and we will be seeking discussions with respective Governments over the coming weeks on what can be done to build more resilience.

New Brexit import checks delayed

As predicted, the current strain on the food and drink supply chain has resulted in the UK Government announcing a delay on the start of new import controls for products coming into the UK from the EU. Already delayed previously, this further delay will see the checks on import documentation for products coming into the EU pushed back from 1 October to 1 January 2022, with the physical inspection of food products and loads, and export documentation such as Export Health Certificates, pushed back from 1 January 2022 to 1 July 2022. Whilst this further delay might be welcome news for members that import ingredients or other products from the EU, it will continue the competitive disadvantage facing our businesses competing in the UK Market and particularly those that export, who will continue to face all the costs and bureaucracy for selling to the EU whilst our EU competitors face none of the same barriers selling to the UK.

Trade talks with UK Ministers

We recently reported that the Scotland Food & Drink Partnership Board (CEOs of the trade bodies and Scottish Government and its agencies) met with Scottish and UK trade Ministers to discuss future trade policy and the implications for our industry. Both discussions were very useful and both Ministers emphasised the desire to work closely with each other on trade policy and trade promotion. We also took the opportunity to reinforce the ongoing Brexit export pain, and the need for simplification of requirements and a veterinary agreement (to remove/reduce need for EHCs) to which the UK Minister said they were open to improvements. Since then, the UK Minister, Greg Hands, was moved post as part of the ministerial re-shuffle. However, as mentioned earlier, we met yesterday with the new Secretary of State and took the opportunity to reiterate some of the key challenges and opportunities in respect of international trade. It was a positive discussion and we have agreed to continue a close dialogue over the coming months. One particular development that we expect to see soon is the UK Government’s official response to the Trade and Agriculture Commission’s report on future trade policy and the implications for the industry. Their report included some helpful recommendations and safeguards for our industry around scrutiny of trade deals and greater involvement and coordination of policy both within the UK and with the development administrations. We will provide information when we know more.

New Chair of Scotland Food & Drink

This week we announced that Lucinda Bruce-Gardyne will take over as Chair of Scotland Food & Drink in November when our current Chair, Dennis Overton, steps down after completing his 3-year term. Lucinda founded the gluten-free business, Genius Foods, and has been involved with Scotland Food & Drink for a number of years as well as holding Board positions with a number of other organisations. More details can be found here.

Thanks
John Davidson

COVID-19 - Guidance for food business operators and their employees

Covid-19 - Guidance for food business operators and their employees (Updated April)

Food Standards Scotland has developed guidance by outlining ways that social distancing can be applied in food manufacturing and processing premises, as well as other mitigation measures that can be implemented by these businesses to enable them to adhere to government advice for preventing the spread of COVID-19.

The guidance for food business operators (FBOs) and their employees aims to assist all businesses in the food and drink sector in following government guidance on infection prevention and control measures against COVID-19. It has been produced with input from the food industry and Trade Unions and reflects the most up to date advice from Scottish and UK Government and Health Protection Scotland.

Click here to read the full guidance.

In addition, while not exhaustive, a checklist of some key Covid-19 controls to consider in the context of business risk assessments is available here.

Previous updates

Key issues update - Friday 10 September

Below is a brief summary of some key developments of recent days. Labour shortages, Covid developments and trade issues have dominated political meetings we’ve had in the last fortnight.

Labour shortages – problems not easing, no shift on immigration

We have yet to get a response from UK Government to the industry letter on labour shortages. There was a specific request to reconsider current immigration policy to at least provide the option of recruiting overseas workers to fill the widespread labour gaps. There continues to be no sign of a shift in thinking on immigration and my hopes remain low of any change, unless shortages become widespread and worse (which is a distinct possibility). We have however had a response from the Scottish Government who were joint recipients of the letter. Cabinet Secretary Mairi Gougeon has indicated support for the request for apprenticeship and career support for the sector and grant funding for automation. However, whilst that support is hugely welcome, we all know these are medium/long-term tools and won’t alleviate the growing workforce pressures as we head towards Christmas. Ms Gougeon has written to the UK Government supporting the industry’s call for action around Home Office policies on visas. I also joined other industry colleagues in giving evidence at the first session of the Scottish Parliament’s new Rural Affairs, Island & Natural Environment Committee last week, referencing in particular the priority needing placed on tackling labour shortages.

New Brexit import checks – delay likely

I think it is increasingly likely that the current strain on the food and drink supply chain will result in a delay on the start of new import controls for products coming into the UK from the EU. Already delayed once, the checks on import documentation for products coming into the EU are due to start on 1 October, with the physical inspection of products and loads due to begin on 1 January 2022. Whilst any further delay would be good news for members that import ingredients or other products from the EU, it will continue the competitive disadvantage facing our businesses that export. They will continue to face all the costs and bureaucracy for selling to the EU whilst our EU competitors face none of the same barriers selling to the UK. That said, nothing has been announced yet, this is just speculation, so in the meantime continue any preparations you are making for import controls starting in the next three weeks.

Trade talks with UK and Scottish Ministers

The Scotland Food & Drink Partnership Board (CEOs of the trade bodies and Scottish Government and its agencies) has met with Scottish and UK trade Ministers in the last week. The Board met Scottish Government Trade and Tourism Minister Ivan McKee, which was followed by a meeting with UK Minister for Trade, Greg Hands, yesterday (Thursday). Both were very useful discussions and both Ministers emphasised the desire to work closely with each other on trade policy and trade promotion. The ongoing Brexit export pain was emphasised to both. The need for simplification of requirements and a veterinary agreement (to remove/reduce need for EHCs) were highlighted as key steps. Mr Hands said the UK Government remains open to improvements and whilst they still would not support a Swiss-style agreement to align standards with the EU, they are in favour of a New Zealand model of equivalent standards on specific products. The latter doesn’t remove the need for EHCs, but can simplify them and reduce the level of border inspections.

Covid fears – need to re-emphasise baseline measures

In the last week, there has been a lot of Ministerial interaction on the rocketing Covid case rates in Scotland. I have been involved in separate meetings with Economy Secretary Kate Forbes and Deputy First Minister John Swinney (along with Clinical Director Jason Leitch and Chief Medical Officer Gregor Smith). The strong message was around their reluctance to reintroduce restrictions but the need to keep re-emphasising the baseline measures (face masks etc). There remains a particular emphasis on encouraging younger people to take up their vaccine appointments and encouraging everyone to be doing twice-weekly home testing (testing kits available at your local test centre and other places). 2-3% of current Delta Covid cases are still resulting in hospitalisation, versus 10-13% with the Kent variant. Crucially, it is now believed that 30% of people show no symptoms and yet are still capable of spreading the virus. That is why regular home testing is crucial, even if you have no symptoms or haven’t been in any contact with a positive case. The return of schools is absolutely a factor in rising cases in Scotland (compared to England) but the clinicians believe it isn’t the only factor. I know this has been a relentless slog, but all our ongoing efforts to re-emphasise the baseline protection measures to our staff – and the need to get the vaccine and do regular testing – remains important. Links to our Coronavirus Hub and the latest guidance for business are below.

All the best
James Withers