Category: Brexit

Trend Towards Reduced Sugar Content for Processed Food and Drink Products Taking Hold

epamonitoring

Summary

Campaigns to reduce the sugar content of food and drink products are gaining traction with consumers, while coordinated efforts are underway to promote greater use of alternative sweeteners within the food and drink industry. The success of efforts to reduce ‘hidden sugars’ however will be strongly influenced by the UK’s future sugar sector trade policy. UK sugar tariff reductions post-Brexit could slow down current efforts to reduce sugar usage in food and drink products, undermining public health policy objectives.

The trend towards a reduction in the sugar content of processed food products is gaining ground amongst EU consumers. According to analysis from Mintel ‘consumers in European markets are cutting their consumption of sugar – in Poland and Spain 63% are actively reducing consumption or avoiding the ingredient altogether. Some 60% of Italians are doing the same, as well as 55% of French consumers and 54% of Germans’ (1).

Research commissioned by the labelling organisation Sugarwise found 73% of shoppers said they ‘might or would definitely switch from their usual brand to one carrying the Sugarwise logo’. Sugarwise certifies ‘food with less than 5g of free sugars per 100grams and drinks with less than 2.5g per 100 ml’. Sugarwise is expanding its activities to mainland Europe after initially launching in the UK (1).

The move towards reduced sugar usage in food and drink products will be facilitated by the initiative launched by the UK Food and Drink Federation (FDF) and the British Retail Consortium (BRC) to bring together data and analysis on the range of sugar alternatives and their practical use in different food and drink product manufacturing activities.

Ingredient manufacturers and researchers are being invited to provide details of products which would assist with industry reformulation efforts, aimed at reducing ‘hidden sugars’ in food and drink products without compromising  the quality, taste, safety or shelf life of the product. The initiative is explicitly aimed at taking food and drink industry reformulation efforts to the ‘next level’, in response to Public Health England’s guidelines and the UK government’s Childhood Obesity Plan, which targets a 20% reduction in sugar consumption by 2020 (2).

Meanwhile Sugarwise has called on the UK government post-Brexit to apply differential import tariffs, based on the sugar content of products imported into the UK. It has called for low or no-sugar brands to enter the UK market free of tariffs.  This is seen as necessary to address the current reality that ‘healthier products …tend to be more expensive’ (1).

Comment and Analysis

While the practicality of the proposals advanced by Sugarwise for the application of differential tariffs on food and drink imports based on their sugar content may be questioned, it does raise the broader question of the consistency of any UK government moves to liberalise access to the UK sugar market post-Brexit with government health policies aimed at reducing per capita sugar consumption both by imposing taxes based on the sugar content of products and through voluntary guidelines on sugar reduction in manufactured food products (see companion article ‘Multiple challenges pending for ACP sugar exporters’, 1 May 2017).

This issue of how the UK government plans to reconcile its public health objectives related to reducing ‘hidden sugars’ in food and drink, with pressures to liberalise import tariffs on agricultural products such as sugar, will be critical to the future pace of the erosion of the value of any preferential access which ACP countries may be able to reconsolidate on the UK for their sugar exports in the post-Brexit period.

Currently scheduled EU reforms are projected to reduce sugar prices on the EU market. However within 18 months, if current sugar sector tariffs are retained and the UK’s exit from the EU is mishandled such that MFN tariffs are introduced on UK/EU27 mutual trade, then UK sugar prices could recover strongly. At present EU27 suppliers provide around 20% of UK sugar consumption (mainly from France and Holland). This trade would grind to a halt if MFN duties were imposed on mutual UK/EU27 trade (see companion article ‘Agro-Food Sector Effects of the Application of MFN Duties on EU27-UK Trade:  An Area of Potential ACP Concern and Opportunity’, 18 August 2017).  In this context, with expanded UK beet production likely to meet only 15% of UK consumer demand by 2019, sugar shortages could emerge with disproportionately high increases in UK retail sugar prices occurring.

This could create new opportunities for ACP sugar exporters to the UK, if public health concerns around ‘hidden sugars’ were to outweigh the lobbying efforts of Tate & Lyle Sugar to secure a removal of current import duties on world market priced sugar (see companion article ‘What are the implications for ACP sugar producers of Tate & Lyle Sugars expectations on UK sugar sector policy post-Brexit?’, 10 April 2017) and UK Department of International Trade (DIT) efforts to fast track the conclusion of FTA arrangements with major developing country groupings such as those in the Mercusor Group.

Source
(1) Foodnavigator.com, ‘Healthiest products should be tariff free post-Brexit, says Sugarwise’, 25 August
http://www.foodnavigator.com/Policy/Healthiest-products-should-be-tariff-free-post-Brexit-says-Sugarwise
(2) Foodnavigator.com, ‘FDF-BRC-back-coordinated-approach-to-sugar-reduction’, 21Augusts 2017
http://www.foodnavigator.com/Ingredients/Carbohydrates-and-fibres-sugar-starches/FDF-BRC-back-coordinated-approach-to-sugar-reduction

Key words:    Sugar, Food and Drink Federation, British Retail Consortium, Sugarwise
Area for Posting: Sugar, Brexit

EU Milk Production Responding Once More to Price Recovery, with Buoyant Exports

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Summary

Efforts to curb EU milk production expansion through financial incentives for voluntary production reduction are held to have met with some success in promoting improvements in farm gate milk prices. However rising farm gate prices is now stimulating a renewed expansion of milk production. This is despite prices still being below farm production costs. The EMB continues to call for a comprehensive Market Responsibility Programme which includes mandatory production restraint.

EU exports of SMP and fat filled milk powders to ACP markets continue to grow, with WMP exports being sustained. Certain ACP markets are also being targeted for increased cheese and butter sales.

While ACP markets remain of marginal significance to overall EU dairy exports, for certain products and for countries these markets collectively are of growing significance. In addition it should be borne in mind it only requires a small volume of EU exports to have a disproportionate effect on individual African dairy markets.

ACP governments seeking to grow their own milk production, as part of integrated dairy sector development strategies, will need to closely monitor current EU export trends, including in fat filled milk powders. ACP governments may need to look at what trade measures can be set in place to sustain local dairy sector development efforts. Extending the product coverage of EU MMO analysis of trade flows to include fat filled milk powders could assist in this regard. Read more “EU Milk Production Responding Once More to Price Recovery, with Buoyant Exports”

EU poultry meat production rising despite avian flu outbreaks

epamonitoring

Summary

Avian flu outbreaks have left overall EU poultry meat production largely unaffected. Although AI related restrictions reduced EU poultry meat export volumes in the first half of 2017, particularly to South Africa the largest single export destination (-63%). Export growth to Gabon, DRC and Ghana while extremely high (+120%;96% and 69% respectively) could not outweigh declines in EU exports to South Africa and Benin. Beyond the current AI crisis in the EU, expanding imports of whole birds from Ukraine, the impact of lower feed costs on EU production and possible Brexit related disruptions of the EU27-UK poultry trade, could all fuel a further expansion of EU exports to Africa. This could continue to inhibit efforts to promote local poultry sector development across Africa. Patterns of Belgium poultry meat exports suggest African governments need to pay closer attention to the origin of poultry meat imports nominally originating in particular EU member states. Read more “EU poultry meat production rising despite avian flu outbreaks”

EU Farmers Continue Campaign for Stricter EU Citrus Black Spot Controls

epamonitoring

Summary

EU farmers organizations continue to push for stricter SPS controls on citrus imports including the mandatory use of cold treatment. The South African citrus industry believes such a requirement would be an economic disaster for the industry. In the context of the Spanish citrus industry’s pressure for stricter EU SPS controls, the UK’s departure from the EU could offer a life line for the South African citrus industry. If SPS controls not relevant to UK agricultural production were lifted and duty free-quota free access to the UK market could be secured in line with the South African government’s current aspirations for post-Brexit trade relations with the UK, then less restrictive market access requirements would apply potentially opening up additional export opportunities to the UK market. Read more “EU Farmers Continue Campaign for Stricter EU Citrus Black Spot Controls”

Implications of UK proposals for future customs arrangements in trade with the EU27 for ACP countries

epamonitoring

Summary

UK proposals for future customs arrangements with the EU seek to subvert the sequencing of negotiations laid in the EU Council instructions to the European Commission for the conduct of the Brexit negotiations. The UK proposals have been criticized as ‘a fantasy’ in some political quarters of the EU. The proposals nevertheless include elements which could be built on in protecting ACP interests within the Brexit process. The UK’s reiteration of assurances of continuity in access to the UK market for ACP exporters leaves unaddressed how this is to be achieved. The UK’s ambitious aspirations for trade agreements with non-EU countries encompassing services, digital trade and trade in goods, suggest concluding such agreements could be a lengthy process. This highlights the need for transitional arrangements to ensure continuity of ACP access to the UK market under current terms and conditions from day 1 of the UK’s formal departure from the EU. Read more “Implications of UK proposals for future customs arrangements in trade with the EU27 for ACP countries”

Hard Brexit Could Severely Disrupt EU27-UK Agro-Food Sector Trade

epamonitoring

Summary

While the EU has been urged to ‘take a more active role in trying to shape a Brexit outcome that is least damaging to its interests’, the ACP Group needs to ensure this approach is extended to the EU’s traditional developing country partners such as the ACP Group.  It is becoming increasingly apparent that for major ACP agro-food export product groups, Brexit could have a major impact on the functioning of existing ACP supply chains currently serving the EU28 market.  This needs to be fully assessed so that as the Brexit negotiations develop the key priorities for administrative and regulatory initiatives and marketing adjustment support are identified.    Read more “Hard Brexit Could Severely Disrupt EU27-UK Agro-Food Sector Trade”

Agro-Food Sector Effects of the Application of MFN Duties on EU27-UK Trade: An Area of Potential ACP Concern and Opportunity

epamonitoring

 

Summary

If MFN duties are introduced on EU27-UK trade as a result of a failure to reach a new trade agreement this could disrupt existing ACP supply chains. However such a development could also present opportunities for ACP countries to expand their direct exports of value added products to the UK in sectors such as the cocoa sector.  Marketing adjustment and investment support however could be needed to enable ACP exporters to respond positively to the challenges which lie ahead. Read more “Agro-Food Sector Effects of the Application of MFN Duties on EU27-UK Trade: An Area of Potential ACP Concern and Opportunity”

UK Area Under Sugar Beet Set to Surge

epamonitoring

 

Summary

A major expansion of the area under sugar beet in the UK (+ 1/3) is planned in 2017/18, with potentially a further major expansion by 2020 if current investment plans of Al Khaleej International to re-establish sugar beet processing in Yorkshire are approved. While a failure to conclude a UK-EU27 trade agreement could open up new export opportunities for ACP sugar suppliers to the UK, this would be strongly influenced by future UK sugar sector tariff policy. If tariffs remain unchanged the source of ACP sugar imported into the UK could shift from the Caribbean and Pacific suppliers to lower cost Southern African suppliers. UK government policy statements suggest Southern African LDC sugar exporters would enjoy the most secure commitment to continued duty free-quota free access for sugar exports to the UK market post Brexit, providing them with an inside track in pending negotiations over supply agreements for 2019. Read more “UK Area Under Sugar Beet Set to Surge”

UK Food Policy Academics Warn of Serious Brexit Complications for UK Agro-food Sector

epamonitoring

Summary

Academic analysis suggests the lack of attention to detail and serious capacity constraints in the UK administration could undermine the functioning of UK food safety and SPS control systems with this serving to disrupt the smooth functioning of import supply chains.  It also argues policy uncertainties around Brexit could well enhance the influence of large agro-food sector players to the detriment of the smooth functioning of agro-food sector supply chains.  This suggests a need for more proactive engagement of ACP exporters associations in these Brexit related policy issues. Read more “UK Food Policy Academics Warn of Serious Brexit Complications for UK Agro-food Sector”

Post Brexit port chaos could disrupt ACP Supply Chains to the UK via the Netherlands and Belgium

epamonitoring

Summary

A consultancy report suggests significant additional logistical costs could arise on EU27-UK agro-food trade regardless of the final UK-EU27 tariff dispensation, as a result of the introduction of new customs controls. Depending on post-Brexit arrangements the cost effects range from additional transportation costs to a need to fundamentally rethink the import-export trade for perishable products. Given major ACP supply chain serve the UK market via other EU member states, this could profoundly disrupt the functioning of these supply chains, with fresh fruit, horticulture and floriculture exports via the Netherlands being most severely affected.  This requires a study to scope the scale of the problem and identify possible remedial measures and the creation of market repositioning support initiatives by both the EU28 and UK authorities. Read more “Post Brexit port chaos could disrupt ACP Supply Chains to the UK via the Netherlands and Belgium”