With businesses having had time to digest the implications of yesterday’s Spring Budget, we gauge the reaction of a cross-section of the food and drink industry to the Chancellor’s announcement.
Ian Wright CBE, Director General, Food and Drink Federation, says: “We are pleased to see productivity and innovation at the heart of [the] Budget.
“We welcome the Chancellor’s commitment to improve productivity, boost R&D and help bridge the skills gap. Access to a skilled workforce is particularly pressing for food and drink manufacturing as we require an additional 130,000 new recruits by 2024. It is important that food and drink manufacturing as a sector is fully recognised in the new technical qualifications and we look forward to being closely involved in their implementation.
“It was also pleasing to see details of how the £4.7bn from the National Productivity Investment Fund announced at Autumn statement will be invested in science and innovation. A number of global food and drink companies have already chosen to base their R&D centres here and we want the UK to be the number one location of choice for others too.
“The revision of the R&D tax credits system was something we had asked government for and we support. Increasing simplicity around the process for claiming R&D tax credits will benefit companies of all sizes – and SMEs particularly.
“We continue to oppose the Soft Drinks Industry Levy because of its undue focus on sugar (as opposed to calories) and because there is no evidence that it will reduce obesity. Consequently, while we’re pleased to see the Chancellor acknowledge the efforts made by soft drinks manufacturers to reduce sugar levels in their products, we continue to believe that implementation of the Levy should be paused while such good progress is being made voluntarily.”
Bruce Fowler, ratings expert at Bruton Knowles, says: “Landlords will be raising a glass to the Chancellor following the government’s pledge to support British pubs as part of today’s budget announcement.
“Although our economy appears to be much stronger, many pubs are either still suffering from previous years’ uncertainty, or as in many cases, have had to close their doors permanently.
“Government has pledged to offer a £1,000 discount to pubs with a rateable value of less than £100,000 to help protect them against increased business rates, which will be available to almost 90 per cent of pubs.
“We are pleased money has been set aside for this industry. It is encouraging that government recognises the importance of pubs in the rural economy as they are often the hub of local villages and towns.”
Adrian Colman, Chief Executive at Wincanton, said: “The additional £270m announced to support autonomous vehicles, robotics and artificial intelligence research is a welcome move by the government to keep the UK at the forefront of disruptive technologies.
“As the biggest British logistics business, we’re already seeing the potential of these technologies to raise productivity across the supply chain. That’s why just this week we launched W2 Labs – an accelerator programme aimed at challenging start-ups to develop new logistics solutions through digital technologies.”
Debbie Wood, Director of Professional Development for CIEH, says: “Less tax being generated from the sugar tax on soft drinks is positive news. Producers have clearly got the message that they need to change their practices and initiatives are spreading as only today, Nestle announced their chocolate bars will soon contain less sugar.
“There is still much work to do on this front and success will only be achieved if the Government and industry work together to adopt more effective mechanisms to support healthier food offers.”
Mike Benner, Managing Director of the Society of Independent Brewers (SIBA), says: “The £1,000 reduction in business rates for pubs with a rateable value below £100,000 is welcome support for the sector, although much more needs to be done, but this contrasts sharply with the two pence increase on beer tax which is a blow for the millions of people who enjoy a pint of British beer in their local pub and also for Britain’s 1,800 small brewing businesses across the country.
“We called for local brewers and community pubs to be supported with a cut in beer duty to build confidence, enable investment and create jobs in light of increasing costs and uncertainty, but the Chancellor’s decision will be a setback.”
Dougal Sharp, Founder and Master Brewer of Innis & Gunn, says: “We welcomed the freeze in beer duty last year and we were hoping for a similar positive incentive from the Chancellor this time around. It is incredibly disappointing to see an increase in alcohol duty in the latest budget, consumers are going to be hit hardest by this rise and I fear for the impact it will have on pubs already facing enormous pressures.
“We’re in the middle of a beer boom in Scotland, with over 100 active breweries for the first time in over a century; we have recently invested over £750,000 in increasing capacity at our own Brewery, and the government should be doing all that it can to support our industry.”
Miles Beale, Chief Executive of the Wine & Spirit Trade Association, says: “It is disappointing that the Chancellor has failed to support a great British industry. He has increased what were already excessive and unfairly high rates of duty for the UK’s wine and spirit consumers and businesses.
“Between Brexit’s impact on the pound and rising inflation the wine and spirit businesses face a tough trading landscape. This is a missed opportunity to back British business and help out struggling consumers.
“The added uncertainty of another Budget in six months’ time is unwelcome and will further undermine business – and consumer – confidence.
“At least there is some sign that Philip Hammond cares about levelling the playing field. It is important that he treated all alcohol products equally. It is welcome news that he has introduced a consultation on wine and made wine between 5.5 per cent and 8.5 per cent – a category which holds a great deal of potential for innovation, especially for lower ABV products.
Julie Hesketh-Laird, Scotch Whisky Association Acting Chief Executive, says: “A nearly four pe cent duty rise and a 79 per cent tax burden on a bottle of whisky is a major blow, reversing recent progress. Distillers will find it hard to understand why the Chancellor is penalising a strategically important British industry with this tax increase.
“At a time when government should be supporting a key home-grown sector, we face a damaging tax rise on top of the uncertainties of Brexit. Looking to the autumn Budget, we will be arguing strongly that it is time for a new approach to excise duty outside the constraints of EU excise law. The system is in need of a fundamental review and reform to make it fair and competitive.”
Colin Valentine, CAMRA’s National Chairman, says: “UK beer drinkers, pubs and brewers have been let down by the Chancellor’s decision to increase beer duty for the first time in five years.
“The announced two penny a pint increase marks a return to the days when the much-hated Beer Duty Escalator contributed to 75,000 job losses, 3,700 pub closures and a 24 per cent fall in beer sales in pubs. The rise in beer duty will ultimately hit consumers in their pockets and lead to pub closures across the country.
“The government’s U-turn on beer duty is a real missed opportunity to support consumers. The UK still pays one of the highest rates of duty across Europe, only consuming around 12 per cent of the beer yet paying nearly 40 per cent of all beer duty in the EU. Further beer duty increases will lead to unsustainable price increases in pubs. The decision completely ignores the pressures that are being faced by the beer and pub sectors.
“The Government has recognised the unique role that pubs play in our communities in England by introducing a new temporary £1,000 discount on business rates bills for all pubs with a rateable value of less than £100,000. CAMRA has warmly welcomed this relief and has called for it to be made permanent and increased further in future Budgets.
“While this discount will provide welcome relief for the majority of pubs, not all will benefit as the relief does not apply to the largest pubs so a minority are still faced with very large business rate increases.
“We are delighted that the Government has recognised the vital role that pubs play both in our local communities and our economy by introducing a new rate relief specifically for pubs in England.
“The announcement of a new rate relief for pubs in England is a ground-breaking step which recognises both the importance of pubs and the unfair impact of the business rate system on pubs. This new relief offers huge assistance to pubs and is a step towards CAMRA’s ambition of securing a £5,000 rate relief reduction for all pubs.
“While this is welcome news for most pubs, some of the largest pubs will be excluded from the new relief. For example, the CAMRA award winning Baum pub in Rochdale will be unaffected by this discount. The Baum pub’s rateable value is going up by 376.6 per cent, and the pub will pay an additional £47,327 per year once transitional rate relief ends.
“CAMRA is calling on local councils to use the new discretionary fund announced today to support those pubs that will still be hit by massive business rate increases over the coming years.”