With the latest news emerging of the departure of the Chancellor, Kwasi Kwarteng, there continues to be significant political and market volatility and uncertainty facing the industry and below is a summary of some of the key issues.  We recognise the unprecedented nature of the challenges we face and are here to support you – please do get in touch with us to share any insight, concerns or on issues we can support you with.

More action on energy, but more still needs to be done

The UK Government announced further measures this week to support businesses in the face of unprecedented energy costs. Following on from the welcome recent announcement to establish the Energy Relief Scheme, something we had been pressing for here, essentially providing a discount on the wholesale price of gas and electricity for businesses similar to the intervention for consumers, the UK Government moved this week to expand the time period for the new scheme having initially applied to contracts agreed on or after 1 April 2022. The announcement this week expands this period to include contracts that were entered into from 1 December 2021, meaning more businesses will benefit from the scheme.  Whilst this is very welcome, we continue to have concerns that this scheme is only guaranteed for 6 months, unlike the intervention for consumers which is supported for 2 years.  As such, we continue to make representations to both the UK and Scottish Governments to extend the scheme for the industry and had a constructive meeting with the Scotland Office this week to press the case for an extension. Further discussion is now planned for the coming weeks.

The UK Government has also brought forward further measures to regulate the energy market through new legislation, the Energy Prices Bill, which will enshrine the current support in law and seeks to secure “affordable and fairly-priced home-grown energy for all”, achieved through a range of measures such as limiting the revenues that energy generators can accrue; decoupling the price of gas from wholesale energy prices; and encouraging additional renewable energy generation in the UK through “contracts for difference” - fixed contracted prices to cover upfront costs.  We will provide more information on this new legislation as it makes it passage through the UK Parliament over the coming weeks.

Cost of production pressures – further support; Scottish Government Emergency Budget Review

This week we wrote to John Swinney, the Deputy First Minister at the Scottish Government, to input to the Scottish Government’s Emergency Budget Review scheduled for 24 October – a copy of the letter can be found here.  We reiterated that food and drink businesses are facing disproportionately negative impacts from the current crisis and outlined specific requests for the Scottish Government to consider, including the need to pause all current regulation, the introduction of  rates relief, and increased levels of capital investment in order to kickstart the economy. 

Meanwhile, we continue to consider what further support we can provide to help the industry respond to the unprecedented challenges and, where possible, unlock those growth opportunities through our market development and capability building activities, more details of which can be found on our website.  As part of that, we are in the process of finalising a bespoke portal on the site to provide you with sources of help, up-to-date information, and a place to find out more about what we are doing in the face of these enormous challenges as well as opportunities for your business to grow. This will go live by the end of October and we will provide more details shortly.

Deposit Return Scheme – discussions continue

Our work on Scotland’s Deposit Return Scheme continues. Last week, we met with Lorna Slater, the Scottish Government Minister responsible for the scheme, to discuss the industry’s concerns and what solutions might be possible to mitigate the potential adverse implications. Specifically, we discussed the proposed timing of the implementation and the challenges with industry being able to comply in light of the operational pressures being faced, the costs of participating in the scheme, and a range of operational issues such as online take back requirements and return points.  The Minister listened, signalled that a range of issues were being considered by Circularity Scotland, and agreed to give us an update in the coming weeks on further developments. Since then, we, along with a range of other trade bodies, have written a further letter to MSPs across the Scottish Parliament alongside a document outlining our most pressing concerns and proposed solutions, including a delay for small producers being involved in the scheme at all.

High Fat Sugar Salt Regulation

As updated previously, we submitted a letter and our response to the Scottish Government’s Restriction of Promotion of Products High in Fat, Salt and Sugar consultation. We have asked that the regulations be delayed due to the cost crisis but also provided our views on the scope of the regulation should the bill continue.

We have since been made aware of an opportunity for businesses who might be impacted by the regulations to provide direct representation about their quantifiable impacts, should regulations be introduced. We encourage affected businesses to do this, as only you will know the impacts on your business if you are unable to promote your products - you can submit your views here: https://consult.gov.scot/population-health/fdc233a2/ until 11 November.

You do not need to fill in all sections and we encourage producers to consider page 10 and 11, which seeks your opinion on the types of promotions that would most impact on your business.