Scotland’s food and drink sector at ‘pivotal moment’, ministers told
Confidence in Scotland’s food and drink sector fell in the final months of last year – with ministers being told the “world-class” industry is at a “pivotal moment”.
The Food and Drink Federation (FDF) claimed the sector is “uniquely placed to make a positive impact” across Scotland.
But with businesses coming under “increasing pressure”, David Thomson, chief executive officer of the body in Scotland, said ministers at Holyrood must work with other parts of the UK to “minimise costs and complexity for businesses, and ensure we can continue to achieve growth”.
His comments came after confidence among food and drink firms fell to -47% in the final three months of 2024, with this said to be because of growing inflationary pressures, barriers to trade and upcoming extended producer responsibility (EPR) fees for packaging.
That comes despite the latest FDF report showing food and drink manufacturing has grown by more than a third (36.5%) in Scotland over the last decade.
We’ve reached a pivotal moment for the Scottish Government to collaborate with other nations to minimise costs and complexity for businesses.
The sector contributes £5.2 billion to the Scottish economy, accounting for almost a third (31.1%) of Scotland’s manufacturing turnover.
The Powering Communities report for 2024 added that food and drink firms also employ some 47,000 people – with this total having grown by 3,000 in the last year alone.
This includes some 10,000 people working in the spirits industry making drinks such as whisky and gin while there are 7,000 people employed in both the fish sector and making bread and pastries, such as pies.
Mr Thomson stated: “Our industry plays a vital role in maintaining a thriving food system here in Scotland, providing high-quality, affordable food while boosting productivity, and driving investment and trade.
“We’re uniquely placed to make a positive impact in every village, town and city, in every constituency across Scotland.”
He added: “With food and drink businesses under increasing pressure, we’ve reached a pivotal moment for the Scottish Government to collaborate with other nations to minimise costs and complexity for businesses, and ensure we can continue to achieve growth.”
FDF Scotland wants the Scottish Government to “remove roadblocks to growth” to help support the future success of the sector, he added.
The body also believes there are regulations that the UK Government should either reform or eradicate, adding new policy initiatives could help grow the sector, benefiting communities across the UK.
Rural Affairs Secretary Mairi Gougeon said Scotland’s “world-class food and drink industry is a symbol of our nation’s rich heritage and innovation”.
Adding that the industry was the largest manufacturing sector in the country, she said it “plays a vital role in supporting national food security and creates thriving island and coastal communities”.
She added: “The sector has been beset by a series of challenges over recent years including Brexit, which has created new barriers to trade, driven up food prices and supply chain costs and contributed to labour shortages.”
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To help in this area, she said the Scottish Government had “consistently supported” the need for a comprehensive sanitary and phytosanitary (SPS) agreement – setting out rules for food safety and animal and plant health standards – with the EU, adding ministers are “currently working with the UK and other devolved governments to negotiate this”.
Ms Gougeon continued: “In addition, since 2023, the Scottish Government has provided £10 million towards the industry-led strategy Sustaining Scotland: Supplying the World, which seeks to bolster the sector over the next decade and supports activity which will increase Scotland’s resilience as well as food security and supply.
“We are also engaging constructively with the UK Government on the forthcoming UK industrial strategy to ensure Scotland’s key industrial strengths, opportunities and priorities are represented strongly in the document.
“We remain focused on working in partnership with industry, including Food and Drink Federation Scotland, to empower our food and drink manufacturers to thrive; ensuring the sector continues to grow, innovate, and provide for communities across Scotland and beyond.”
