The grocery industry spends millions of pounds each year beanding the ear of politicians and making sure the industry's needs are understood by policy makers. Nick Hughes reports
Tuesday lunchtime at the Labour Party Conference in Brighton and a panel of food industry experts has gathered to debate the issue of food security. A stone's throw along the beachfront, Gordon Brown is preparing to deliver his keynote speech to a room packed full with MPs, civil servants and activists. Networking opportunities don't come any better than this. Or so you'd think. But in Brighton, the corporate big hitters are conspicuous by their absence.
With the current crop of politicians fixated on restoring their reputations or launching manifestos, many industry figures feel it's simply not worth the train fare. "I'm not sure how many people from the industry are going to the conferences," admits one communications director. "In the current political climate, I'm not sure it would be particularly fruitful."
Th0se who are going are picking and choosing. Next week, the circus moves to Manchester, where the Conservatives will present the case for a Tory government. One communications director reveals that his trade body will have six times the representation in Manchester it had in Brighton, a sharp contrast in focus that reflects not only the shifting political dynamic in Westminster but also the changing nature of the industry's lobbying efforts.
Whether lobbying directly, using a public affairs firm or allowing industry bodies to lobby on their behalf, food and drink companies on both sides of the retail supplier fence are upping the ante as they try and win an audience with key members of the Tory party. "The number one issue for most industry sectors is the prospect of a Conservative government," concedes a public affairs consultant. "That's what everybody's focusing on."
As they have ever since David Cameron became Tory leader, adds James Lowman, chief executive of the Association of Convenience Stores. "We've stepped up our work with the Conservatives over the past couple of years," he says. "I think that the Tory leadership is having to adopt a government mentality and as they do that, it's very helpful if we can influence them and say these are some of the things you should be considering."
In Manchester, those working on behalf of the food industry will be hoping the Tory party is more sympathetic to its needs than many feel Labour has been.
That's not to say there haven't been some successes. British Retail Consortium director general Stephen Robertson claims its campaign in 2008 to overturn a proposal for zero tolerance on listeria in food products saved the retail sector £150m. "With some things, such as listeria, you don't see the effect on the profit and loss because the issue has been headed off before it arrived so no one has picked up the cost," he says.
Retailers have also scored a minor victory on business rates, achieving a 60% deferral of this year's increase in business rate bills. But in the main, the perception is that the current Labour government has not done the food industry many, if any favours, during the economic downturn.
In his pledge in December to use "industrial activism" to help business through the recession, business secretary Peter Mandelson said the government would do more to support services and manufacturing during and after the recession.
To an extent, it did. The banks were bailed out and the car industry propped up, but the food industry has been left feeling short-changed by Mandelson's promise.
The government has so far refused to budge on the reversion of VAT to 17.5% or hikes to alcohol duty; measures to beef up its Trade Credit Insurance scheme have been criticised for not going far enough and there seems little prospect of a reprieve for retailers on the tobacco display ban.
"Mandelson's industrial activism message completely ignored food manufacturing," says Julian Hunt, head of communications at the Food and Drink Federation. "One of the key themes we put to government is around supporting the biggest employer in manufacturing by doing things like delaying the increases in national insurance contributions and not rushing to implement the Agency Workers Directive. By themselves, they might not seem that big, but they're part of this hive of pressure on manufacturers.
"It's not about strangling our sector with red tape but supporting us as a significant employer."
Kellogg's head of corporate affairs, Chris Wermann, believes part of the reason the food industry has failed to wield sufficient clout in Westminster is the lack of a ministry, and minister, to take on its case at cabinet meetings. "Who is going to stand up and sponsor the food industry? Currently Defra is responsible for that, but if you read any reports coming out of Defra they don't talk much about the manufacturing industry, more about agriculture. I think there's still big work to do."
The public affairs consultant, however, believes food manufacturers have adopted the wrong tack in their dealings with government. "Personally, I don't think the food and drink industry has done enough in leveraging the Department for Business to be its back-up. In the current climate, the argument about the pressure on manufacturing and the loss of jobs tends to carry weight."
He suggests the supermarkets have been more effective in making their voice heard in Westminster. "I think there's a big difference between the presence in government on the retailers' side and the presence in government on the manufacturers' side," he says. "Government is so much more scared of the retailers because they know they're closer to the customers. The retailers have been very adroit at using that knowledge to make their presence felt."
Charlotte Hughes, public affairs consultant at lobbying firm Apco, says the ability of the major retailers to respond quickly to new government agendas has helped them head off legislation. "The retailers have to be fast to put in place these measures to avoid rules," she says.
A mooted tax on single-use carrier bags has yet to materialise after supermarkets acted to restrict their availability at the checkout. They have also boosted their bargaining power in the food waste debate by hitting voluntary Wrap targets to reduce wastage by 100,000 tonnes in 2008.
During its most recent term in office, the Labour government has favoured voluntary targets over regulation, particularly where public health is concerned.
Wermann believes that relations between the Department of Health and the food industry have improved since their 2004 low point, when the government launched its Choosing Health paper, which many felt targeted the food industry disproportionately for its role in growing levels of obesity.
"I think the tone has changed and I think the remaining antagonism between industry and government is less than in 2004 after the White Paper on health was published," he says.
Recent voluntary targets for reducing salt and saturated fat in foods, while unwelcome, have been broadly accepted as proportionate and realistic by manufacturers. "We're pleased to see that the quality of the conversations that we've been having with government on the health agenda have definitely improved in the past three years or so and that's made it easier to have the right sort of dialogue about how we can work together," says Hunt.
These politics of compromise are likely to form the backbone of policy under a Tory government. David Cameron has already spelt out a Responsibility Deal on public health, where industry will be spared regulation, including further advertising restrictions, so long as it continues to act on a voluntary basis to improve the healthiness of food. Regardless of which party forms the next government, public health and the environment will remain key battlegrounds.
Hughes believes soft drinks will be next on the UK government's radar, as the debate in the US over taxing them drifts across the Atlantic. "Over the next 12 months, soft drinks are going to have to change their strategy. Taxes are discussed in Europe every now and then, but I think the discussion in the US will trickle down to markets over here eventually."
The New York administration recently published a series of posters in subway stations labelling soft drinks 'liquid candy'. "New York has already banned trans fats, and the tough stance over there on health issues can only impact on policy over here," Hughes adds.
Sustainability is another issue likely to provoke continued debate in the corridors of power. The Conservatives are due to announce proposals for stricter controls on water usage in industry at the Copenhagen climate summit in December. Concerns over water use and greenhouse gases are known to be high on the European Commission's agenda.
Indeed, efforts to minimise the impact of EU regulation on the UK food sector are already dominating conversations in Westminster, says Hunt. "A lot of our work is in getting the UK government and its representatives in Brussels to do a more effective job in the European arena," he says.
But with potentially costly legislation filtering through on health claims and nutritional labelling, lobbying efforts will need to be stepped up to prevent regulation that significantly impacts on the bottom line hitting the UK industry.
The battle in Westminster will rumble on, but future wars will be won or lost in Brussels.