Industry reacts to Labour victory: What the new government means for grocery

Today (5 July) Sir Keir Starmer has been named the new prime minister for the UK, ushering in a new Labour government as it hailed a landslide victory.

Grocery Gazette caught up with some of the country’s leading retailers, and industry bodies to find out what this new premiership could mean for the UK’s grocery sector.

British Retail Consortium

Leading the grocery retail industry, British Retail Consortium (BRC) chief executive Helen Dickinson said it was time to the new Labour government to get “down to business”.

Labour’s manifesto made some crucial commitments for retail, from reforming business rates, planning and the apprenticeship levy, to introducing a specific offence for assaulting a retail worker, and we now await the details of how these will be taken forward.

“Labour recognised that the business rates system is broken. With retail paying 22% of the total rates bill while accounting for 5% of the economy, it is the number one thing in the way of increased retail investment which could unlock growth across the economy. So we look forward to further engagement on the details as the work starts here in turning commitments into delivery.”

Wine and Spirit Trade Association

The Wine and Spirit Trade Association (WTSA) chief executive Miles Beales also said the body looked forwarded to working with the now government and described it as a “fresh” start in comparison to the “heavy-handed approach of the previous Government”.

“Labour has pledged to support business with a stable policy environment and an approach to business taxation that allows long-term planning. We agree and are calling on new Ministers to stick to these principles for then lifetime of the new Parliament – starting with making permanent the temporary easement for wine duty and delaying the ‘Extended Producer Responsibility (EPR)’ scheme to ensure it is fit for purpose.

The chief executive’s comments follow WTSA earlier this week signing a letter calling upon the new prime minister to drop a post-Brexit “sneaky sauvignon” wine tax.

The letter went on to criticise Sunak and argue that the booze tax, which is due to be introduced in February next year, will lead to the increase of some red wines by more than 40p per bottle, and raise the number of tax bands for wine from one to 30.

From 1 February 2025 a single amount of duty paid on wines between 11.5 -14.5% abv – currently £2.67 – will be replaced buy up to 30 different payable amounts from £2.45 – £3.10 per bottle.

Miles Beale added: “Retaining the easement would do exactly what Labour has promised for a new business tax regime: it puts a stop to chaos and delivers a strategic approach.”

Majestic Wine

Majestic Wine CEO John Colley said he hoped the new government would bring a period of “much needed” political certainty and stability for the country, while boosting consumer confidence.

“For retail specifically, we are the biggest private sector employer in the UK, but we haven’t been getting the level of support and engagement that our status as an industry deserves. That needs to change under the new Labour government. We are a proud island of shopkeepers and we want to drive growth, create new jobs and breathe new life into our high streets, but we can’t do that without support from Westminster.

“We urgently need the new government to reform the business rates system. It’s been a problem for years and has been highlighted as a contributing factor for a number of major retailers who have gone out of business over the past two decades.

“The tax has become archaic in a world of multichannel retailing, it’s been crying out for reform for a long time, and I would urge the new government to finally deliver a fundamental review after years of seeing the can kicked down the road.

Colley also said he would join the WSTA in urging the new government to appeal the incoming alcohol duty taxes.

Colley added: “We will also continue to lobby for urgent changes to the proposed new alcohol excise duty regime. This is an ill-conceived policy from Rishi Sunak that will introduce 30 new duty bands for wine from 1 February 2025, unless the new government takes action. It is an unnecessarily bureaucratic system, which will add huge cost and complexity for businesses, and threaten jobs and livelihoods – particularly at the 900 independent wine merchants operating across the UK. We would urge the new Chancellor to put a stop to this policy before it is too late.”

National Farmers Union (NFU)

The National Farmers Union (NFU) has said it is “looking forward to working with the new government” on issues such as boosting national food security, contributing to economic growth and driving environmental benefits.
NFU president Tom Bradshaw described the results of the 2024 general election as a “reset moment for British agriculture”.

He said: “Labour’s manifesto recognised that food security is national security, but it is business confidence which forms the foundation of this. With British farmers and growers ambitious for the future, what they – and the public – need are practical policies that revitalise farm business confidence and deliver on our shared mission of food security.

“In a cost-of-living crisis, our ability to provide affordable, climate friendly and high welfare food will be critical for families across the country, as well as underpinning the UK’s largest manufacturing sector, food and drink, and stimulating economic growth.

“That’s why, for Britain’s farmers, the number one priority for the new Labour government must be to set an increased multi-year agriculture budget for the duration of the next Parliament. This is about investing in the future of British farming – in homegrown food, in the environment and in renewable energy.”

Bradshaw explained that in the coming weeks, the NFU will be building its engagement with Labour ministers to discuss “essential” policy solutions on key issues for its members.

“There are a number of policies within Labour’s manifesto which we will want to see actioned, for example ensuring the new Environmental Land Management Schemes work for all farm businesses, setting core standards for food imports and legislation to boost public procurement.

“At the same time, there are various issues that need greater recognition if the sector is to unlock its potential for growth, such as a fit for purpose Seasonal Workers Scheme, effective import controls, supply chain fairness, investment in infrastructure and flexibility in planning.

“Working together on these immediate priorities is a win-win. The public will get more of the British food they know and love, farmers and growers will have the confidence to build profitable, sustainable, resilient businesses – supporting economic growth and environmental delivery – and this new government will help to secure a safe supply of homegrown food in an increasingly volatile and uncertain world.”

Scotch Whisky Association (SWA)

Scotch Whisky Association (SWA) chief executive Mark Kent said the group aims to work in partnership with the new government and the secretary of state for Scotland to drive growth, create jobs, and boost investment in Scotland and across the UK.

“There is much the new government can do to back Scotch Whisky producers – from reducing the tax burden on spirits in the UK to protecting our industry from tariffs in key global markets.

“During the rest of 2024, there will be opportunities to support Scotch in the first budget of the new Parliament, secure a trade deal with India which will reduce tariffs on Scotch Whisky in this key market, and work closely with the industry as we continue on our journey towards net-zero.

“We also want to congratulate all MPs from across the political spectrum who have been elected to the UK Parliament. With the global reach of Scotland’s national drink supported by supply chain companies in over 400 constituencies across the UK, many MPs have a direct stake in supporting the future success of the industry.

“Together we can ensure that Scotch Whisky is at the heart of the central mission of the next five years – growth and economic renewal,” Kent said.

Iceland Foods

Iceland Richard Walker

Iceland Foods executive chairman Richard Walker described 4 July as a “historic night of politics.”

He added: “Now it’s time to focus on the hard working people of this country and the growth we need to get us back on track.”

Last month, Walker vowed to “bring high street realism to Westminster” as the frozen food retailer launched its first-ever customer ‘manifesto’.

It came as Iceland founder Malcolm Walker was among more than 100 business leaders who signed a letter backing the Labour party’s economic plans.

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