The Food and Drink Federation (FDF) has identified regulation that Government can simplify to “unlock growth and investment” in the food industry as UK manufacturer confidence declines.
The FDF identified that confidence among the UK’s 12,500 food and drink manufacturers was in “sharp decline”, as businesses face a range of rising costs in 2025.
It found that business confidence had “plummeted” to -47% at the end of 2024, compared to -6% the previous quarter, which it reported as a reponse to “turbulence in global markets” and measures announced in the 2024 Autumn Budget.
With manufacturers facing increased costs in the year ahead, FDF also stated that food businesses would “bear the lion’s share” of new Extended Producer Responsibility (EPR) packaging rules.
In its new Ingredients for Growth report, the FDF set out a number of regulations that it believes should be reformed or eradicated, as well as new policy initiatives that would drive growth in the UK food sector.
The report highlighted six key industry asks to create the conditions for an adaptive, productive and innovative food industry:
This would aim to support industry investment in new product development and healthier options for consumers and the transition to net zero.
Creating a plan with Skills England would support the UK food and drink industry as it transitions to a higher-skilled, higher-wage workforce.
FDF said this would help more businesses that are struggling to invest in technology to improve productivity and to innovate healthier products.
To ensure these fees are only used on improving the UK’s recycling infrastructure and not to fund local authority funding gaps.
This would reportedly “revive falling EU exports”, which are down more than a third since Brexit.
This simplification would help business to focus on growth and productivity.
FDF highlighted that as the UK’s largest advanced manufacturing sector, employing around 500,000 people in every constituency, the food and drink manufacturing industry is uniquely placed to help the economy grow right across the UK. This can be delivered by creating more, higher-paid jobs, driving investment, growing export markets, and providing healthier choices for shoppers.
“Government must act to remove the roadblocks and accelerate growth.”
Karen Betts, FDF
Karen Betts, chief executive of the FDF, said: “Everyone eats and drinks every day, and we need a strong food manufacturing sector to protect the UK’s food security, support British agriculture, and provide high quality, nourishing food at affordable prices.
“To do this, the UK needs to remain competitive and at the forefront of global innovation. However, this marked decline in business confidence shows that the Government and industry needs to take action now to ensure we have a thriving, productive food and drink industry into the future.
“We want the UK to offer a much more competitive environment for international and domestic investment in food and drink, to ensure we’re a world-leading destination for new products and ground-breaking research, as well as nurturing iconic brands that are loved here and abroad.
“But with pressures on industry mounting, Government must act to remove the roadblocks and accelerate growth. Together, we have the ingredients to make the UK the best place in the world to run a food and drink business.”
