Richard North, 03/09/2021  
 


It started yesterday with a self-important piece in PoliticsHome headed: "Post-Brexit UK Food Industry Is £2bn Worse Off After "Disastrous" Fall In EU Sales".

The story relied, in part, on "a comprehensive analysis of trade during the first six months of 2021 by the Food & Drink Federation (FDF)", which had been "shared exclusively with PoliticsHome". Data from this source, it was claimed, showed that food and drink exports to the EU were 15.9 percent down on the same period last year, and down by over a quarter (27.4 percent) - compared to the first half of 2019.

These figures, said Labour – cited gleefully in the piece - "blow apart" the government's "myth" that trade disruption is a temporary issues as the UK and EU adjust to the new rules.

Such stonking bad news could not, of course, remain an "exclusive" for long and, through the day, other media started to pick it up, spreading the glad tidings over the internet as online copies proliferated, vying for prominence with the other downbeat Brexit story of the day.

This was Tim Martin's Weatherspoon pubs running out of beer, a story enthusiastically put down, in some quarters, to "supply chain issues" arising from Brexit.

On balance, though, the "trade disaster" story won out, even if only by a short head, as the Guardian piled in with its own version, this one headed, "Brexit: food and drink exports to EU suffer ‘disastrous’ decline", with the addition of a sub-heading telling us: "First-half sales fall £2bn, says industry body, as barriers are compounded by staff shortages".

"Exports of food and drink to the EU have suffered a 'disastrous' decline in the first half of the year because of Brexit trade barriers, with sales of beef and cheese hit hardest", the copy ran, noting that Food and Drink Federation producers had lost £2 billion in sales, "a dent in revenue that could not be compensated for by the increased sales in the same period to non-EU countries including China and Australia".

The paper cited Dominic Goudie, head of international trade at the FDF, who obligingly said: "The return to growth in exports to non-EU markets is welcome news, but it doesn't make up for the disastrous loss of £2bn in sales to the EU. It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support".

Goudie went on to say that the difficulties now facing British food and drinks manufacturers and farmers were compounded by the lorry driver and warehouse workers shortages, which were choking the supply chain.

"At the same time", he said, "we are seeing labour shortages across the UK's farm-to-fork food and drink supply chain, resulting in empty spaces on UK shop shelves, disruptions to deliveries and decreased production". The man then warned, "Unless steps are taken to address these issues, the ability of businesses to fulfil vital export orders will be impacted".

Most readers, one would expect, would be entirely satisfied with this rendition, but it they had bothered to refer back to the original FDF press release, they might have been in for a bit of a shock.

Far from being regaled with a "disaster" headline, they would have found a somewhat different "take" as the Federation announced, up front: "Food and drink exports recovering in non-EU markets".

Sales of UK food and drink to non-EU countries, we were told, were up 13 percent, accounting for 46.6 percent (£4.3 billion) of all UK food and drink exports in the first half of 2021, driven by a return to growth in China, Singapore, Australia, Japan and the Gulf region. This increase, the Federation said, "means non-EU exports are now almost back to pre-Covid levels".

Despite this good news, though, the Federation reported that overall sales of UK food and drink were down £2 billion compared to pre-Covid levels, because of a sharp drop in sales to the EU.

Said the Federation, a combination of the ongoing impacts of the Covid-19 pandemic, and new barriers to trade resulting from the new trading arrangements, have led to a fall in exports to the EU of more than a quarter since H1 2019. Exports to nearly all EU member states fell significantly, including a loss of more than £0.5 billion in sales to Ireland, while sales to Germany, Spain and Italy are each down around a half since H1 2019.

Only then do we get the pre-packaged Goudie quote, where he refers to the " disastrous loss of £2 billion in sales to the EU", which is, of course, what the papers pick up and tun with.

The Federation also offers a quote from John Whitehead, of the Food & Drink Exporters Association (FDEA). He says that: "So many factors continue to impact on the drop in value of UK food and drink exports with supply chain challenges and the inability to connect face to face with customers adding to the difficulties".

Referring to the loss of £2.2 billion sales to the EU since 2019, he adds that, "There is growing evidence that the complexity of trading with the EU has led to businesses moving operations into Europe and of importers looking for alternative suppliers, contributing to the ongoing decline in both UK exports and UK jobs".

What should come over from this is that we are seeing nothing new. Much of this is old news and, while the £2 billion cumulative total from 2019 is used for its shock effect, comparisons between 2019-2021, and 2020-2021 show marginal improvements in some produce lines. The continued deterioration in others, such as whisky, suggest that Brexit cannot be the only factor.

Nevertheless, the media have their headlines and their readers have been treated to another carefully-crafted dollop of distortion. And, not to be outdone, the Guardian has delivered a new piece for today's paper, headed: "Government urged to 'get a handle" on supply chain crisis".

This is the collective wisdom of an extraordinary session of the UK Trade and Business Commission, a group of cross-party MPs and business representatives set up as an independent adviser to government in April, as expressed by its chair, Aodhán Connolly.

So far, the solution is simple: "ministers need to act now to avoid empty shelves in the run-up to Christmas", says the Commission, although it is not yet in a position to recommend the action to be taken. One assumes, therefore, that this is a question of "act now, think later", a stance entirely in accord with modern political thinking.

Laving it on thick, the Guardian tells us that this "call for action" comes as Coca-Cola confirmed social media reports of stock shortages, saying it was battling to secure enough aluminium cans. The chief executive of drinks giant Diageo confirmed it was facing a "more challenging" environment in logistics, shipping and packaging.

Food, retail and logistics representatives, we learn, had told the Commission that supply chain difficulties are expected to last until the end of the year, and warned they could get worse when post-Brexit checks on goods coming from the EU are introduced from October.

"We are actually facing what I can only describe as a perfect storm", says Richard Harrow, chief executive of the British Frozen Food Federation. "Members who would normally be laying stock down now for Christmas say they don’t have the resource to do it".

"It's not just about driver shortages, we are seeing skill shortages across the entire supply chain", Harrow says. "I have never seen the sort of pressures that our members are under. There will inevitably be some price inflation around food".

And there perhaps is the makings of the underlying message. These problems have been a long time coming and, for the most part, entirely predictable. Industry has been caught flat-footed and totally unprepared and, as a result, the consumer must pay. T'was ever thus.

Also published on Turbulent Times.






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