14
Caterer, Licensee & Hotelier
April 2018
BBPA Welcomes Rules of Origin: Food and Drink Sector Faces Hidden Hard Brexit Consultation On Low Alcohol Product Labelling A new report commissioned by the Food and Drink Federation (FDF) and the National Association of British and Irish Flour Millers (NABIM) from Global Counsel has revealed that the UK’s food and drink manufacturing sector could face a hidden ‘hard Brexit’ once the UK leaves the EU as a result of rules of origin.
The BBPA has welcomed the Department of Health’s consultation published yesterday, on low alcohol descriptors in the marketing or labelling of alcoholic drinks. This should provide an opportunity to change the rules to help grow the lower strength market and clarify labelling for consumers. The intention of the Department of Health to use guidance on this issue, rather than the heavy hand of legislation is very welcome. The BBPA has for some time been calling for more flexibility to promote lower strength or ‘lighter’ beers at or below 3.5% ABV. This should extend to labelling descriptors and advertising which will help consumers make informed choices. Current advertising regulations prevent brand owners from promoting lower strength beers as such. The BBPA has consistently supported initiatives that promote lower alcohol options and BBPA members have long supported responsible drinking initiatives. Brigid Simmonds, Chief Executive of the British Beer and Pub Association, comments: “The consultation acknowledges that the sale of lower strength products, as an option for consumers, helps encourage responsible drinking. “BBPA members have responded to consumer demand for a greater range and choice of lowerstrength beers, many with new flavours and ingredients. Investment in no and low alcohol beers has drastically increased in recent years. “Pubs are increasingly providing a growing selection of lower strength alcoholic drinks. Greater clarity in advertising and marketing will allow the lower strength market continue to grow while supporting pubs at the same time.”
‘Rules of origin in an EU-UK FTA: A ‘hidden hard Brexit’ for food and drink exporters?’ warns that due to the international nature of food and drink manufacturing, many UK producers have built supply chains within the EU’s Single Market which may fail to comply with future origin requirements. The report also sets out eight practical recommendations the UK and EU can take to minimise disruption to our essential and seamless trade in food and drink. While it is the intention of the UK Government to negotiate an ambitious free trade agreement with the EU that delivers continued tariff-free trade in goods, including food and drink, exporters would still need to comply with complex origin requirements. This poses a significant risk for UK firms exporting to the EU. This is worth more than £13.3 billion each year. In essence, rules of origin dictate if a product is deemed sufficiently ‘British’ – its economic nationality – and whether it qualifies for a preferential tariff that has been agreed in a trade deal. Once this economic nationality is identified, customs officials then apply the correct tariff or duty to the product. Our manufacturers are committed customers of UK farming but this is dependent on having continued access to imports that complement our use of UK raw materials. The ingredients in many food and drink products are a mix of domestic and international goods, many of which are not produced in the UK or not in sufficient
quantity throughout the year to meet consumer demand.
We know that under existing models applied by the EU, many UK manufactured products would not qualify for preferential tariffs. For example, UK chocolate producers that export £530m of products each year to the EU could face tariffs of 27 per cent or more depending on the value of UK refined cane sugar originating from the world’s poorest countries and the volume of Irish milk in their products.
Manufacturers could face the prospect of either a costly restructuring of their supply chains or de factor barring from future EU-UK trade as a result of the EU’s Most Favoured Nation (MFN) tariffs which are prohibitively high for food and drink, rising to more than 100 per cent on many of our products. Ian Wright CBE, Director General of the Food and Drink Federation, said: “Rules of origin are a big piece of the Brexit puzzle for the food and drink industry. If we fail to secure sufficiently generous rules as part of a preferential trade agreement with the EU, food and drink manufacturers will be the ones who suffer this hidden hard Brexit. They could be facing an increase in exporting costs, or a complete ban of entry to the market. This report is essential reading for those who want to avoid both.” Alex Waugh, Director General of the National Association of British and Irish Flour Millers, said: “Flour millers in the UK source 80 per cent of their wheat from the UK, but also use grain from Canada, the USA and other European countries to make a range of flours with different baking qualities. If the rules of origin adopted in many of the EU’s trade agreements were to apply in a trade deal between the EU 27 and the UK, flour milled with even a small proportion of these grains, and many foodstuffs made from it, would no longer be considered ‘of UK origin’ and would therefore be subject to very significant duties. This would add, for example, €0.10 to the cost of a loaf in Ireland, which is mainly supplied with flour from the UK. Negotiating the right agreement is therefore crucial to the entire food supply chain, including consumers.”
Profits At Top 100 UK Restaurant Groups Fall 64% In Just The Past Year The total pre-tax profits at the UK’s Top 100 restaurant groups have fallen 64% in the past year to £125 million from £345 million, shows research by UHY Hacker Young, the national accountancy group.
that 35 of the UK’s Top 100 restaurant groups are now loss-making – an increase of 75% in the past year – as trading conditions have become increasingly difficult.
The research comes in the wake of several recent high-profile examples of restaurants chains being forced to restructure or to undertake large scale closures across their portfolio of restaurants.
Although the Chancellor has brought forward a planned cut to business rate rises by two years (to 2018), UHY Hacker Young says that more could be done by the Government to help the sector, in particular smaller restaurants.
The Casual Dining Group, which owns High Street chains Café Rouge and Bella Italia, is one of the most recent to report difficult trading with an 18% increase in losses to May 2017 to £60 million.
Recently a group of major restaurant bosses, including the chief executives of Bill’s and the Casual Dining Group, wrote a letter to the Chancellor asking for a ‘root and branch’ reform of business rates.
UHY Hacker Young explains that major drivers behind the fall in profitability across the sector include the effects of over expansion coinciding with soaring costs for restaurants such as: rising business rates, increased supplier and staff costs and poor footfall.
Peter Kubik, Partner at UHY Hacker Young, comments: “The restaurant industry has grown ahead of demand in recent years and is now going through a necessary period of consolidation and restructuring to remove excess capacity. The industry’s woes should be temporary while it deals with this process, as long as
Previous research from UHY Hacker Young revealed
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consumer confidence can be maintained.” “Our view is that many of these chains that are running at a loss are very sustainable businesses once those excess branches are shed.” “Trading conditions over the past year in particular have become more difficult for restaurants, particularly with rising inflation and recent dips in high street footfall.” “Above-inflation rises in the National Minimum Wage are very hard to sustain in low margin businesses.” “The rise of Deliveroo has also had a mixed impact on restaurants because it has often deprived them of sales of alcohol and other drinks, which are normally high-margin sales in restaurants.” “The Government is moving in the right direction in reducing business rates, but more can be done. Some commentators say that rates for some businesses could rise by over £24,000 in the next five years.”
INNATE - Food in Tune! Inspired by the belief that food ought work with rather than against us, Innate are on a mission to contribute a more imaginative and sensory euphoric solution to the healthy snacking arena; utilising a fusion of science and art to create food which is both in tune with our innate requirements as humans and exceedingly delicious.
gory newcomer; packed in eye-catching resealable stand-up pouches, which enable the consumer to snack at their own rate - enjoying longer lasting nutritious sustenance. Their stunning ingredients compilations offer a unique, balanced flavour profile and are by default gluten/dairy/grain/soy/refined sugar free as well as vegan friendly and paleo compliant.
Innate’s first newly launched products are their 100% natural savoury squares, an airdried snack which combine vegetables, coconut and almond in order to achieve a rare and happy marriage of exquisite flavour, nutritional balance and slowrelease sustaining energy. The result of this is an excitingly innovative and intensely satiating cate-
Innate don’t cater to passing whims or fad diets, ‘beyond trend’ their vision is to create life enhancing food that we are born to eat, supporting people to thrive and feel amazing on every level.
All The Major Chains Are Using Digital Screens, Why Aren’t You? Say goodbye to outdated posters and chalkboards and say hello to AdGen. With an entry costs starting at £1 a day and no long-term contracts, it’s the complete solution to your digital signage needs. Put an end to out of date information with our state of the art app, update menu boards and adverts instantly online, on your phone or on your tablet. Developed by someone who knows the hospitality industry inside out, AdGen allows users to create professional looking content for digital signage with ease. After selling his pub in Hastings three years ago, AdGen Director Colin Brighton threw his all into
developing a content creation app that was so desperately needed in the industry. An app that allowed bar owners to create and update digital adverts and announcements to their existing TV screens.
For further details email hello@innatefood.com, visit www.innatefood.com, call 07838 195120 or see the advert on page 15 tomer engagement and information output with AdGen, from bars, restaurants, takeaways and hotels to gyms and convenience stores. Everyone can benefit from AdGen’s innovative concept. It’s been a long and interesting road for Colin and his product, but with total belief in AdGen and a mission statement advocating true partnership and a win-win situation, everyone who utilises AdGen can feel the benefit. Promote sports events, entertainment, food offers, drink promotions, rent third party advert space. The list of opportunities is endless with AdGen. All the major chains are using digital screens, why aren’t you?
Over the last three years, AdGen has been developed and perfected to give users a simple and easy to use system. Now, industries across the board are maximising their cus-
For more information, visit www.adgentv.com or call 0333 577 1914 to arrange an online demo today or see the advert on page 17.