23 November 2022
Momentum is building for food and drink manufacturers ahead of what is going to be an important trading season in Q4 2022, with monthly exports in September 2022 (£1.169bn) up 15.85% on September 2021 (£1.009bn). However, despite the uptick in exports on the previous year, it’s going to be a real balancing act for manufacturers given that energy, produce and input costs are all soaring, making it difficult to balance the books.
The FIFA World Cup in Qatar may provide some further benefits, but, if manufacturers don’t take advantage over the next two months, it’s going to be a challenging 2023, which is already threatening closures amongst energy and labour-intensive businesses. Manufacturers will also be cautious not to outprice consumers purchasing their products, especially given the cost-of-living crisis. With inflationary food prices reaching a 14-year high in October 2022, people are already feeling the squeeze on their weekly food bill.
Clarity still missing following Autumn statement
Many in the food and drink industry have spoken since the Autumn Statement at their disappointment regarding a lack of clarity on energy support post 31 March 2023. While there has been more positive news on some tariff suspensions impacting the industry, the government’s decision to scrap the alcohol duty freeze, means a tax increase of nearly 16% is set to hit consumers by December 2022. Food and drink manufacturers need to strike while the iron is hot during the World Cup and while the weakened sterling appeals to international markets.
Growth in whisky exports
It’s not all doom and gloom for the sector though, with whisky exports continuing to grow and even potentially break £6bn by the end of December 2022 – which would mark the first time in food and drink export history. The visibility of whisky as a leading UK food and drink export may help drive other food and drink markets by creating a position for other produce to fall in behind.