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.