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Competitiveness of UK food and drink manufacturers could be 'hindered' by rising costs

Publication Date: 02 Aug 2018 - By ReachX Team By ReachX T.

Macro Multi Asset UK EU Consumer


More than three quarters of UK food and drinks industry participants expect input prices to rise in the remainder of 2018, according to a new survey.

In its latest quarterly business confidence survey published this week, the UK Food and Drink Federation (FDF) found that more than half of those polled had seen increased ingredient costs (62%), increased packaging costs (61%) and increased energy costs (51%). 

However, on a more positive note, 54% of businesses had also seen an increase in sales in the UK, while 42% reported an increase in new product launches.

The UK’s future relationship with the EU was amongst the top three concerns of businesses polled with contingency measures seen as barriers to success for many. 

“Increases in input prices were expected to continue in part due to exchange rate volatility,” the FDF noted.

Despite this, respondent the FDF survey felt general business confidence had remained static during the last two quarters (66%). 

Looking to the second half of the year, many companies said they were still looking to invest, with investment in new machinery and product launches two of the three opportunities identified by those FDF polled.

Responding to the findings, FDF chief executive Ian Wright said the shadow of a 'no deal' Brexit looms large over business confidence amongst the UK’s food and drink manufacturing industry. 

"This should be no surprise: there are so many crucial questions to which businesses need answers. Despite this, manufacturers remain resilient. It is encouraging to see so much future investment planned. Now the UK Government must start providing the clarity needed to navigate unchartered waters as we look to prepare for our future outside the EU."


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