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Post-Brexit confidence up

The food and drink industry is determined to ’put referendum behind them’



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Post #Brexit confidence up

UK agriculture has been urged to grasp the opportunities arising from an increasingly bullish food and drink sector

 

New research from Lloyds Bank revealed food and drink firms had forecast growth of 19 per cent over the next five years as they shrugged off fears Brexit could put the brakes on growth.

 

Analysts said it showed the uncertainty surrounding Brexit had done nothing to temper the ambitions of the growing UK food and drink sector, which is on course to create 75,000 new jobs by 2021.

 

Farm leaders claimed a burgeoning food and drink sector could allow farmers to piggyback on increased demand as new growth markets emerged.

 

The research, which provides the first snapshot of the sector following the UK’s decision to leave the European Union, revealed 44 per cent were going to invest more in their businesses post-Brexit compared to 22 per cent who said it had fallen.

 

A third of firms have increased plans for research and development, with just 17 per cent of firms revising down their plans.

 

Opportunity

 

NFU economist Lucia Zitti said the farming industry was determined to seize this ’historic opportunity’.

 

"It is crucial that we help shape a new vision for an agricultural policy which ensures a dynamic, profitable and productive future for farming and growing," she said.

 

"It is good news to see that the report shows that businesses’ confidence has grown since the EU referendum’s vote.

 

"Confidence is an early indicator of farm profitability and investment activities on farm."


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"Confidence is an early indicator of farm profitability and investment activities on farm."

 

Best case scenario

 

AHDB market specialist Stephen Howarth cautiously welcomed the findings, adding businesses were assuming a 'best case scenario'.

 

"If we are in the single market and have more freedom then I do not see why it could not be a positive outcome," he said.

 

"But I could also paint a scenario which is quite different. I can understand businesses wanting to be bullish and stay positive.

 

"Impartial of the situation, all you can say is things are uncertain."

The report found:

  • 44% of businesses see leaving the EU as biggest potential threat
  • 75,000 jobs to be created by 2021
  • 32% looking into joint ventures
  • 42% looking to make efficiency savings
  • 30% looking to restructure operations

Strategy

 

The Brexit decision has also led to a change in export strategy with the number of firms targeting exports to Western Europe has decreased from 60 per cent to 47 per cent this year but more businesses now intend to target Eastern Europe and Russia.

 

Andrew Naylor, head of agriculture for Lloyds Bank, said: "This report holds some key clues for the farming industry about where its main customer, our domestic food and drink sector, is heading.

 

"But, while more businesses see provenance as a challenge, rather than an opportunity, the proportion which think English and Welsh produce has a good international reputation held firm at 86 per cent."

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