UK – The UK Food and Drink Federation (FDF) has published the second of its new quarterly business confidence surveys revealing that more than three-quarters of manufacturers expect input prices to rise in the remainder of 2018.

According to FoodingredientsFirst, more than half of those polled had seen increased ingredient costs (62%), increased packaging costs (61%) and increased energy costs (51%) having the most significant impact on their businesses in the second quarter of the year.

Positively, 54% of businesses had also seen an increase in sales in the UK, while 42% reported an increase in new product launches.

The UK’s future relationship with the EU was amongst the top three concerns of businesses polled with contingency measures seen as barriers to success for many. Increases in input prices were expected to continue in part due to exchange rate volatility.

Despite this, respondents felt general business confidence had remained static during the last two quarters (66 percent).

FoodingredientsFirst added that with regards to the second half of the year, many companies said they were still looking to invest, with investment in new machinery and product launches two of the three opportunities identified by those FDF spoke with.

“The shadow of a ‘no deal’ Brexit looms large over business confidence amongst the UK’s food and drink manufacturing industry.

This should come as no surprise – there are so many crucial questions to which businesses need answers,” said FDF Chief Executive Ian Wright CBE.

“Despite this, manufacturers remain resilient. It is encouraging to see so much future investment planned.

Now, the Government must start providing the clarity needed to navigate unchartered waters as we look to prepare for our future outside the EU.”

“There are so many different potential scenarios it’s difficult to say, things like the outcome of negotiations with the EU on future trade, whether we maintain access to existing EU FTAs and future agri support in the UK would all affect whether ingredients became more expensive post-Brexit,” added Dominic Goudie, FDF Policy Manager (Exports, Trade and Supply Chain).

FDF recently said that the UK food and drink industry needs help to “turbocharge” the sector’s exports and restore productivity levels to avoid falling behind other European countries once Britain has left the EU.

An industry-wide report highlights the key growth opportunities for the food and drink industry, the UK’s largest manufacturing sector which contributes US$37 billion to the economy annually, employs 400,000 people and is a crucial part of the nation’s US$144 billion farm-to-fork food chain.