April 18, 2021

Food & Drink sector reacts to the Budget

While it will still take some time to digest all of the implications of Rishi Sunak’s Budget, here we get a reaction from a number of figures across the UK’s food and sector sector to get first impressions, which are overwhelmingly positive.

Liam Manton, Co-founder of Didsbury Gin

“We welcome the news from the Chancellor in his budget statement that he is scrapping the planned duty increase for alcohol including spirits. Since 2015, the number of distilleries in the UK have grown to record numbers and brands like ours supports hundreds of jobs and contributes billions to the UK economy each year. Any increase in alcohol or spirits duty would have stifled innovation and growth for many companies in our iconic industry. We’re pleased that the Chancellor is backing both the spirits and hospitality industry to ensure we can continue to innovate, drive growth and firmly put us all on the road to recovery.”

Karen Betts, Chief Executive of the SWA

“The freeze on duty announced by the Chancellor is good news for hospitality and gives distillers some breathing space in the face of some of the worst trading conditions anyone can remember – caused by a combination of US tariffs, the coronavirus pandemic and the end of the Brexit transition period. 

“What’s really important to us is that the government redoubles its efforts to resolve the 25% tariff imposed by the US on Single Malt Scotch Whisky.  This stems from an unresolved trade dispute between the EU, UK and US governments over subsidies to aerospace in breach of WTO rules.  It is causing real damage to our US exports, which have fallen by over half a billion pounds since the tariff came into effect.  And it risks impacting permanently Scotch Whisky’s market share in the US, which has long been one of our most successful markets.

“The Chancellor must also set out a clear timetable for the reform of the UK’s outdated system of alcohol taxation.  Now the UK has left the EU, we can modernise and reform the duty system to ensure that it is clear and fair both to businesses and consumers.”

Ian Wright CBE, FDF’s Chief Executive

“Food and drink manufacturers will welcome today’s Budget. The Chancellor’s announcement struck the right balance between supporting recovery and acknowledging the difficult choices that have to be made to restore the country’s finances. Food and drink businesses supplying the hospitality and food service sectors will welcome the extension of the furlough scheme. However, we have concerns that support tapers too soon and should be kept under review.

“As the UK’s largest manufacturing sector, we welcome the news that the Bank of England and the Chancellor are doubling incentive payments for businesses hiring apprenticeships. However, increased flexibility of the apprenticeship levy would enable the system to work for the wider food and drink supply chain, particularly SMEs, and must be considered in relation to any new incentives.

“The Chancellor rightly expressed his firm intention not to increase the cost of living and has recognised the importance of encouraging investment as the key driver of recovery. He should therefore review proposed regulatory changes that will increase food prices.”

Rob Coleridge, senior associate and Consumer sector expert at Irwin Mitchell

“The Chancellor’s £5bn shot in the arm for retail and hospitality firms will go some way to helping some of the smaller businesses reopen, but a wider and more holistic package of support is needed to help them deal with the new normal where online dominates.

“The announcement recognises that the High Street requires specialist and more bespoke financial assistance, which it desperately needs and I hope that this is not too little too late.

“High Street businesses are dealing with the multitude of issues which for many include the need make major changes to their business.  Challenges to businesses include pivoting to online sales being their dominant revenue source, innovating in how existing high street premises can be used to add value and to interact with consumers in safe but experiential way, and supporting employees that are reluctant to return to work as a result of Covid anxiety.

“Above all, although we are emerging from Covid, there is still a lot of uncertainty which means businesses need to be robust and agile enough to cope with the exaggerated fluctuations in demand and exciting new opportunities that may arise.”

Mohammad Paknejad, Co-founder, Nutshell Covent Garden  

“Unfortunately, the budget announcement did not fully live up to the expectations and the hype generated by the Chancellor. As encouraging as it was to see him extending the VAT cut; it was very disappointing that he decided against extending the business rate holiday for another year. As he admitted himself in his speech in the Parliament; the hospitality and tourism sectors have been hit very hard and without further support from the government; many businesses might not be able to survive the effects of the pandemic. The sector is in desperate need of representation in the cabinet and it’s not clear as to why the government and the Prime Minister refusing understand this.” 

Marcos Fernandez, MD Iberica Restaurants and Arros QD 

“Today the Conservative party has shown a strong support for business, which I am sure is a challenge with the ever growing debt that we are accumulating. The extension of the furlough will allow the labour flexibility needed as consumer confidence is recovered. It is also long enough to allow for the still uncertain short term. A slightly longer extension to Business Rates would have been welcomed to build up the cash reserves necessary to be able to honour our lease payment terms, which bring me to the still ongoing problem of rents due which hang over many businesses which have not been tackled and will ultimately make viable businesses fail through the cash flow when the legal containment is lifted. Associating help to renovate high streets for institutional landlords in exchange for common agreed terms to tenants would have been very welcome. An increase in local environmental officers to open early businesses which have certified safe conditions could kick start the industry and allow a more focus approach to helping businesses.” 

Mark Lewis, Chief Executive Hospitality Action  

“We welcome the Chancellor’s announcement that the Furlough Scheme and wider package of business support will continue beyond the summer. Despite this positive news many businesses won’t survive and thousands of jobs will be lost over the coming months. Hospitality Action stands ready to help as many people facing hardship as possible and we’re committed to protecting the mental wellbeing of the industry as we tentatively return to work.” 

Jack Stein, Chef Director Rick Stein Restaurants 

“I really like the idea of the super deduction for investment. This will definitely stimulate our sector as hospitality looks to reopen. From investment in outdoor spaces to kitchen equipment this is a really positive step. Also the hospitality specific changes like vat extension and then a reduction to 12.5% will be very helpful as we look to get on with reopening and trading again.” 

Stuart Procter, COO The Stafford Collection  

“I think the extension of the furlough scheme is terrific and will certainly assist moving forward, as we begin to slowly open up the businesses. With regards to the VAT cut extension and cut in business rates, of course that is of huge help to us, however it would have been far more useful to have this running throughout the whole of 2021. Our London venues in particular will take a long time to get back to the same levels of trade as seen in early 2020 as they are so dependent on international travel. We’ve got a long way to go, however it’s great to see support continuing from the Government as we hopefully come out the end of this crisis.”[ 

Luke French, Co-Founder JÖRO Restaurants Sheffield 

Duty on Fuel, Beer, Cider & Wine Frozen – great news for suppliers/producers in getting the supply chain back in motion.  Restart grants are welcome also at up to £18,000 presumably relative to business rates again as per previous grants. This is crucial to covering overheads in the coming months with significant concern following April 12th when outdoor hospitality can re-open and indoor remaining closed. Take out/click & collect business models may be impacted initially here.    

“VAT at 5% until September – again would like to see this relative to restrictions being removed. If not then review of this on longer term is required.  Very welcome however during closure and reduced capacity opening.  business rates until June – should be on the basis of social contact restrictions being lifted – with distancing in place venues are running at 50% capacity. So even a % payable would be a better outlook should restrictions still be in place.  Surely this needs to be tightened as to which sectors are entitled to use this also.  

“A review into abuse of grants & furlough scheme should be undertaken also to fully understand the actual cost of Covid.”  

Miles Beale, Chief Executive of the Wine & Spirit Trade Association

“The decision to freeze wine and spirit duty comes as a huge relief for British businesses, pubs, restaurants and its suppliers following the crushing – and continuing – closure of the hospitality sector, for months on end, during the pandemic.

“Chancellor Rishi Sunak seems to ‘get it’. He understands that supporting our industry will allow it to recover, rebuild, create jobs and – in time – replenish revenues to the Treasury.  He has also shown he is in touch with men and women from all walks of life who want to enjoy their chosen tipple without getting stung by further tax hikes.

“We will all raise a glass to the Chancellor tonight – and look forward to more permanent support for the sector following the review of alcohol taxation.”