Sales boom but food producers' confidence dips over Brexit fears
Confidence is increasingly fragile within the UK's food and drink sector following the Brexit vote despite sales reaching their highest levels since 2013, a survey has found.
A majority of Food and Drink Federation (FDF) members - who make up the largest manufacturing sector in the UK - have reported increased ingredient prices, a drop in product margins and concerns for the future raised by their EU workforce.
More than two-thirds (69.5%) are less confident about the UK business environment while just 11% are more confident.
However the survey coincides with quarterly figures from UK retailers showing food sales at their highest levels since 2013, "suggesting a disparity between business and consumer confidence levels", the FDF says.
The FDF is calling for an "industrial strategy partnership" with Government and for urgent assurances for the industry's workforce from the EU that they will have the right to remain in the UK.
In the survey, almost three-quarters (71%) of companies employing EU staff say these employees have expressed concerns about the referendum outcome, with about one in 12 (8.7%) businesses reporting that EU employees intend to leave the UK.
FDF director general Ian Wright said: "We share Government's view that we need to make the best of Brexit. Food and drink industry confidence is low. Slower revenue growth, coupled with prolonged business uncertainty, is affecting the industry's ability to invest.
"The assurances we heard from Government last week must be underpinned by credible plans for restoring confidence and negotiating a workable future relationship with the EU.
"Working with Government through an industrial strategy partnership, we believe we can counterbalance uncertainty arising from the EU exit process and secure world-class status for the sector."
MP John Stevenson, chairman of the All-Party Parliamentary Group for Food and Drink Manufacturing, which meets today to discuss what Brexit means for the sector, said: "Brexit will present both challenges and, through sensible negotiation, opportunities for businesses in the UK's largest manufacturing sector - food and drink.
"Government and industry partnership has never been more important to the future of this vital sector. It is essential that colleagues in Government go into negotiations equipped with a clear understanding of this sector's priorities, which is why open dialogue and the active participation of food companies and their representative bodies in this debate is so essential.
"Food and drink is a national success story, with massive untapped opportunity to boost exports and improve its already impressive productivity performance, delivering even more for the UK economy."
A Government spokesman said: "Leaving the EU offers us an opportunity to forge a new role for ourselves in the world, and we are determined to make sure the UK remains the best place in Europe to run and grow a business.
"As a nation, we've sold over £10 billion worth of food and drink overseas in the first six months of this year, and exports are up almost 6% compared to 2015. We are building on that success and, through our Great British Food Unit, are working with industry to establish new trading relationships across the globe to help boost the sector."