UK general election: three top issues for the food and drink industry


On 8 June British voters will go to the polls to elect a new government, and the UK’s snap general election will raise many issues of interest to food and beverage companies. These include future access to the European market, action on wages, and business rates.

GlobalData Consumer provides a brief of how the election period will shape these issues, and what players in the food and beverage industry should look out for:

The Living Wage. Pressure will grow to increase minimum wage, hitting farmers, retailers and foodservice operators hardest

Proponents of the Living Wage claim that the minimum wage needs to be increased to better reflect the wage people need to live on. According to the Living Wage Foundation, the minimum wage should be set at £8.45 per hour across the UK and £9.75 per hour in London, compared to the current rate of £7.50 per hour for over 25s and £7.05 for under 25s.

The living wage is popular among many voters, and will therefore likely see widespread support from all parties. The popularity of these proposals make repeated increases in the minimum wage a certainty in the next Parliament.

However, any increase in minimum wages will strongly impact the agricultural industry, retailers, and foodservice operators, who employ large numbers of low wage and part time workers. Food and beverage companies should plan for increased staffing costs in future.

Brexit. Votes for a ‘softer’ Brexit could rescue frictionless access to European markets and labour

Commentators expect the election to yield an increased Conservative majority. This will strengthen Prime Minister Theresa May’s hand by making her less beholden to the ‘Hard Brexit’ wing of her party.

As a result, easier access to the European market could be maintained, and a less restrictive immigration regime implemented. Both these issues are crucial to the future profitability of consumer goods companies.

A strong showing for other staunchly pro-European parties, such as the Scottish National Party (SNP) and the Liberal Democrats, could also drive a ‘softer’ Brexit.

However, should the SNP replicate its strong performance in Scotland in 2015, pressure will grow for a second Scottish independence referendum. While easier access to European markets could be salvaged, food and beverage companies may instead find themselves planning on how to deal with an independent Scotland.

Business rates. Under the radar, but potential relief for small and medium food and beverage companies

While debate around business rates will get few headlines in the press, it will have an outsized impact on the food and beverage industry.

Despite pressure from business bodies such as the Federation of Small Businesses, business rates increased in April of this year. Increased business rates can be a major hindrance to the development of small food and drink companies, who are often leaders when it comes to flavour innovation, identifying the next trending ingredients, and creating new consumption occasions for stagnating categories.

While the British economy has been resilient since 2016’s vote to leave the EU, many economists expect the impact of leaving the EU to limit economic growth in future. Should this happen, pressure will become overwhelming to ease the taxation burden on businesses, particularly small and medium enterprises.

For more strategic insight into UK consumer issues, take a look at GlobalData’s latest reports.