FDF defines industry’s nutritional guidelines ahead of the Budget

Posted on 21 Mar 2012 by The Manufacturer

The Food and Drink Federation’s director general, Melanie Leech, sets out her hopes for today’s budget announcements with an emphasis on policies that support growth.

The Food and Drink Federation’s director general is justly proud of the achievement of the sector she represents. UK food and drink manufacturing accounts for 15% of the sector’s activity overall and employs around 400,000 people.

But the sector could do more. A recent report from Grant Thornton, in association with FDF, suggested that 20% growth can be achieved by 2020 – provided government can provide the right support.

Below Ms Leech describes what this should mean in term of Budget decisions today:


“UK food and drink manufacturing is an energy intensive industry, and manufacturers are increasingly concerned about the impact of rising energy costs (including transport fuel duties) on their ability to remain competitive.

“In today’s Budget we hope for greater clarity around future energy and emissions policies which we hope will enable better business and investment planning. Without policy change, we estimate that our sector could face price rises of up to 40% from the combined effects of carbon price support and the EU ETS, which would clearly impact substantially on our ability to fund low carbon technologies for the future.”

Access to finance

“The growth prospects of food manufacturers, in particular SMEs, are restricted due to lack of working capital to grow their businesses and capitalize on opportunities in foreign markets. We will hope to hear about the Chancellor’s credit easing plans as well as the promotion of alternative sources of finance to the traditional banks.”

R&D Tax Credits

“R&D is vital for to the growth of our industry, however many of our members, in particular SMEs, tell us that they find the current arrangement on R&D tax credits complicated and difficult to access. Many of our competitors overseas also offer significantly higher rates of relief despite the planned increases to the SME scheme in April 2012, and so we hope that these issues are addressed tomorrow.”

Corporation tax and Capital Allowances

“We fully support a further reduction in the 23% corporation tax rate, but believe that the current capital allowance regime is also a major barrier to investment in manufacturing in the UK. A more favourable tax landscape is essential if we are to compete internationally for investment, as well as to sustain and grow the industry domestically.”