May said UK would look for new "comprehensive free trade agreement", giving "greatest possible access" to single market.

May said UK would look for new "comprehensive free trade agreement", giving "greatest possible access" to single market.

Major geopolitical events on both sides of the Atlantic in 2016 are set to make themselves felt over the next 12 months. As part of just-food's look at the year ahead, contributing editor Ben Cooper sets out the food policy areas to watch in the UK, the EU and the US in 2017.

Following the seismic political shocks of 2016, the food sector has much to ponder as the new year gets underway.

Adapting to an ever evolving food policy environment across multiple markets is already a constant and preoccupying challenge for global food companies. The game-changing events of last year have added two hugely disruptive factors to a food policy landscape already in a significant state of flux as a result of issues such as climate change and health concerns.

A dramatic change of policy direction under President Trump and Brexit will impact on the operating environments in the UK and the US while having repercussions beyond those countries. With regard to food policy, what 2017 appears to offer in abundance is the thing business loathes – uncertainty.

UK food manufacturers brace for Brexit

For UK food companies, Brexit casts a long and foreboding shadow. The trading and employment profiles of the food industry and the importance of EU regulation and subsidies in food and farming mean these will be among the sectors most affected by the UK leaving the EU.

The principal problem for industry has been the lack of any firm indication from government of what the post-Brexit settlement with the EU might look like. 
A major speech by UK Prime Minister Theresa May last week finally provided some clarification, confirming the could would be leaving the EU single market. On the latter, she said the UK would not seek to be part of the Common Commercial Policy or be bound by the Common External Tariff, elements that would prevent the UK from forging its own trade agreements. Instead, the UK will seek its own bespoke customs union with the EU.

While providing more detail than some expected, the speech only clarifies the outcome the UK government desires. What it actually achieves after the two-year exit negotiation period, due to begin on 31 March, is another matter. 

David Lowe, partner at UK-based international law firm Gowling WLG and head of its Brexit unit, points to the "considerable uncertainty" UK food companies still face. "UK food businesses exporting to the rest of the EU do not know what tariffs and trade barriers they will face. Food manufacturers importing do not know how hard or easy it will be to import from the EU or the rest of the world. UK farmers do not know what the future of agricultural support will be."

A further prevailing concern is the complex negotiations are unlikely to be concluded within two years. A transition period, characterised by Theresa May as an "implementation phase", may well be required, though whether such an arrangement can be agreed with the other 27 EU member states, how long it might be and what form it might take are further uncertainties.

Ian Wright, director general of UK industry association the Food and Drink Federation, was "encouraged" the UK government is pursuing a phased Brexit and welcomed the greater clarity May's speech gave. However, he voiced concern about access to EU labour, which is vital to the sector, arrangements for the Irish land border and the need for detailed consultation with industry regarding any regulatory changes arising from Brexit. 

After last week's speech, there is greater clarity but no semblance of certainty. How Brexit will affect key policy areas on which the UK food industry has constantly sought greater clarity, concerning trade, agriculture, labour and regulation, will remain unknowns for the foreseeable future.

Meanwhile, during the coming year, the UK government will be rolling out its childhood obesity strategy, launched last August. Sugar reduction targets, set for nine specific food categories according to advice from Public Health England, are scheduled to be published in March, while the first six-month interim report on the progress food companies are making towards the 2020 targets should also be published within the year.

Targets to reduce total calories in a wider range of products contributing to children's calorie intake are expected to be added from 2017. The government's Scientific Advisory Committee on Nutrition (SACN) is due to make further recommendations regarding saturated fat intake this year, while the soft drinks levy will be included in the 2017 Finance Bill and will come into effect in 2018.

While the UK has opted not to tax food products, the imposition of the levy speaks to the growing appeal among policymakers for fiscal levers to address obesity. Several other EU countries have announced plans to introduce such measures, namely Ireland, Spain and Estonia. Policymakers across the EU are certain to be assessing the progress of these fiscal approaches.

The view from the EU

Brexit is also an issue occupying policymakers in many other countries, and will have major implications for food companies and farming sectors across the EU. FoodDrinkEurope (FDE), the Brussels-based representative body for the EU food sector, expects this to be a predominating issue it will be addressing during 2017.

"As the largest manufacturing sector in Europe, the food and drink industry on both sides of the Channel will be strongly impacted and we are still trying to assess exactly how deeply," an FDE spokesperson tells just-food. "We know that the social aspects will be important, as well as manufacturing, sourcing of raw material, and of course the circulation of manufactured goods in both directions."

FDE did not comment on May's speech, choosing not to add to its expression of "disappointment" at the referendum result in June. The organisation has set up a Brexit "taskforce", and intends to publish a fuller position in the spring.

Other policy areas FDE expects to be prevailing concerns in 2017 include country-of-origin labelling. FDE believes labelling initiatives recently undertaken by certain EU member states threaten to "seriously hamper the single market, the cross-border supply food chain and the free circulation of goods".

In May, the European Parliament passed a resolution calling for mandatory origin labelling of certain foods, including milk, dairy and meat products. At the time, FDE said this would negatively impact the competitiveness of European food companies, particularly SMEs, and push up prices.

FDE is also "closely following" moves to introduce EU legislation on unfair trading practices. The association favours a framework which complements existing national measures and the industry-based Supply Chain Initiative. FDE says it will also be demonstrating continued commitment to the European Commission's environmental footprinting initiative and preparing the industry's "position and priorities" regarding revision of the Common Agricultural Policy.

Crucial elections this year in France, Germany and the Netherlands provide further uncertainty for food companies operating in those countries and, given their significance in the Brexit negotiations, for the EU and UK food sectors.

Trump yet to show his hand on food policy

Food manufacturers operating in the US are reflecting on how an unprecedented political event might impact on the food policy landscape and the market.

Among the contrasts between Donald Trump and Barack Obama will likely be their approach to food policy. While the Obama administration engaged in food policy to an unprecedented degree, campaigners are concerned a Trump administration will not only cease to prioritise progressive food policy, particularly regarding childhood obesity, labelling, food safety and food subsidies for low-income families but undo some of the work done during the past eight years across such issues.

In an interview in December for Politico magazine, departing US Agriculture Secretary Tom Vilsack appeared relatively sanguine, predicting a Trump administration would not row back on Obama food and nutrition measures, such as those around school meals and food assistance.

The tone from campaigners has been markedly more alarmist. They are concerned not only by the de-regulatory zeal of the new President but also by the impact of a Republican-dominated Congress. 

Campaign groups such as Center for Science in the Public Interest (CSPI) and Food Policy Action have voiced concern over the reforming and repealing intentions of the Freedom Caucus, a group of conservative Republican members of the House of Representatives which has grown in strength since its formation in 2015. 

In December, the caucus handed Trump a list of 232 regulations it believed he should target in his first 100 days in office, which included measures relating to food safety, school meals, food labelling and environmental protection brought in during the Obama terms in office.

As Vilsack also suggested in December, food companies are likely to get an easier ride under a Republican-controlled Congress and the new Presidential administration than they did particularly in the Obama first term. However, there will certainly be areas of a zealous repealing agenda, for example in relation to environment, food safety and labelling, that many food companies will wish to oppose.

To date, the clearest example of the business world mobilising to temper the Trump approach is the Low-Carbon USA campaign led by sustainability non-profit Ceres to ensure continued US support for the COP 21 climate change accord. Where a Trump appointee has arguably given campaigners and many companies a clear and disconcerting steer is his choice of avowed climate-change sceptic Scott Pruitt to head up the Environmental Protection Agency. The Ceres campaign is now backed by 630 companies and investors, including food manufacturers General Mills, Unilever, Campbell Soup Company, Danone and Mars.

While campaigners welcomed President Obama's active engagement on food policy, ironically the best they may hope for as the new President takes office is that food policy will not be a high priority, allowing what has been put in place to escape any repealing purge the Freedom Caucus and Tea Party Republicans may instigate. 

Food policy being "low on the [Trump] administration's priority list is not necessarily a bad thing for the next year", CSPI director of nutrition policy Margo Wootan suggests. However, she adds: "Given the anti-regulatory rhetoric during the campaign and the reliance on very conservative policymakers and industry tycoons, we are on high alert about what this administration will do around food and nutrition."

In contrast to the little Donald Trump said about food and farming while campaigning, his oft-stated intentions regarding immigration and trade could have serious implications for the food and farming sectors. Concerns over the impact of plans to reduce immigration and tighten immigration controls mirror those in the UK in the wake of the Brexit vote. Food production in both the UK and the US is hugely reliant on immigrant labour.

In a statement welcoming the appointment of Sonny Perdue, American Farm Bureau Federation president Zippy Duvall made direct reference to the impact of immigration and trade policies on food production. Describing Perdue as an "outstanding nominee", Duvall said he is "a businessman who recognises the impact immigration reform, trade agreements and regulation have on a farmer's bottom line and ability to stay in business from one season to the next".

As well as voicing concern about the Farm Bill and a potentially savage repealing agenda, food activist and chef Scott Colicchio, co-founder of Food Policy Action, is also concerned about the impact of Trump immigration and trade policies on food and agriculture in the US. 

"If he [Trump] manages to deport as many people as he says a lot of food is going to be sitting in the fields wasting away because there'll be no one to pick it," Colicchio says, adding that the US farming sector will "fight hard" against trade policies which directly threaten agricultural exports.