Opinion from global food and drink experts, Zenith Global
Header

Parts of the UK are now officially in a state of drought and the EA is warning that more regions will follow, with the situation being potentially worse than in 1976 (although I can’t really remember that…). I’ve been asked a few times recently whether this will impact the food manufacturing sector. So, what are the implications for industry? There are a series of steps water companies can take, depending on the seriousness of the situation.

Initially, water companies can apply for drought permits, which can allow normal abstraction restrictions to be relaxed to ensure continuity of supply – so environmental protection rules are relaxed in times of need.

Second come ordinary drought orders, which restrict use of water for certain activities specified in the Drought Direction 2011. This includes, for example, washing vehicles, using hosepipes and dust supression. In addition, the EA can restrict abstraction from rivers and groundwater where deemed necessary.

Finally, emergency drought orders can be enforced. These allows water companies to restrict water use for any use that they consider to be inappropriate. This is where they could legally stop businesses using water, but it is highly unlikely to happen, particularly for food and beverage manufacturers.

Of course, if you have your own supply, there may be practical limitations to what you can supply should groundwater or river levels fall considerably.

You can get more information on this from Defra here: http://www.defra.gov.uk/environment/quality/water/resources/drought/

SIGNS OF ECONOMIC SLIPPAGE

July 12th, 2011 | Posted by Richard Hall in Economic - (0 Comments)

The simplest single line image on the state of the world economy is showing signs of slippage.

After a period of steady 4% a year economic growth, the line dropped to a 3% decline in early 2009, climbing back to 4% growth again throughout 2010.  Now, it’s edging down below 4%.  Take a look.

I do hope it’s not heading South again.  My appreciation, once more, to The Economist, this time on 11th June.

EXTRAORDINARY VIEWS OF UNITED STATES

February 21st, 2011 | Posted by Richard Hall in Economic - (0 Comments)

Pictures can say so much more than words.  Rarely do words add to pictures.  But The Economist magazine recently published two maps that epitomise the financial strengths and financial burdens of the world’s biggest economy.

One map renames all the states with tongue firmly in cheek.  The other changes the names to the countries of equivalent economic size.  Thus :

  • Texas becomes Taxes or Russia.
  • Michigan becomes Muchgone or Taiwan.
  • New Jersey becomes No Jersey or Switzerland.

 Here are the full maps.

WORLD FOOD PRICES – HOW SERIOUS ?

January 19th, 2011 | Posted by Richard Hall in Economic | Food - (0 Comments)

Average world food prices are now higher than during the crisis three years ago that sparked riots in numerous countries.

This chart from the Financial Times of 6th January, taking data from the United Nations Food and Agriculture Organisation, is all too clear.

A dangerous rise? FAO food price index
Yet, this time, there is less cause for alarm.  Some of the highest increases have affected corn, fruit, meat, sugar and vegetable oil.  The two biggest staples of rice and wheat, on which much of the world depends, have had relatively good harvests.

Volatility, however, in weather and in price inflation remains a high risk for us all.

STATE OF THE WORLD

January 13th, 2011 | Posted by Richard Hall in Economic - (0 Comments)

My favourite chart, as it summarises the entire global economy in a single line, shows growth back above 4% for the past three quarters, almost identical to its pre-downturn levels.

World GDP % change on a year earlier

It doesn’t feel this good to me or most people I meet, but it is undoubtedly a reassuring overall trend.

I am indebted again to The Economist magazine, this time the edition of 11th December 2010.

While I was in Brazil a fortnight ago for the national mineral water industry congress and trade fair, one of the main talking points was the astonishing level of taxation on using water from natural sources for bottling.  In all the stories I heard, the amount is equivalent to 40% or more of the average retail price in shops.

Not only must this be the highest level of tax on water anywhere in the world, it is also perverse.  I saw many obese children and yet this tax is greater than on any other food or beverage.  Moreover, mineral waters contain no chemicals unlike treated tap waters.

As with the Brazilian economy, the local bottled water industry is in robust good health.  How much better health for all if these taxes were reduced to the same levels as other consumer goods ?

ABINAM, the national association, has worked effectively with government to improve the quality and management of industry standards and is to be commended for making a priority of these tax concerns.

My favourite chart, because it summarises the entire world economy in one line, shows remarkably how we:

  • held growth steady at more than 4% up to the end of 2007
  • fell off a cliff to worse than a 2% downturn at the beginning of 2009
  • and have now recovered back above 4% growth in the second quarter of 2010.

 World GDP % Change on a year earlier

It’s plain to see from the latest graph printed in the 31st July edition of The Economist.

So far, so much better than many would have imagined.

DIRECT FROM WORLD BANK

July 2nd, 2010 | Posted by Richard Hall in Economic | Health - (0 Comments)

Visiting the World Bank in June 2010

Friday 25 June

At the end of the week, I went to Washington, where my first meeting was with someone who had just come from a briefing session on nutrition and health at the White House. My second meeting was with the International Finance Corporation arm of The World Bank.

The subject of our discussion was putting into practice some of the big picture aspirations expressed at the United Nations. More specifically, it was about improving agricultural production of certain fruits that are likely to be in short supply as world demand increases.

Would industry fund a joint initiative with The World Bank to boost output ? We were talking about possible projects in Latin America, East Europe and Asia.

Well, time will tell. Anything you can do ?