Brexit – see the real issues and give business a fighting chance

The recent Brexit petitioning of the Government by five of Britain’s biggest business lobby groups could not be more timely. In fact, from the Packaging Federation perspective such a ‘hurry up’ is very much overdue.

Lest it be forgotten – Brexit or no-Brexit, business drives the economy and creates wealth. Simple as that. The post-Brexit political saga – long-drawn out, tedious and inconclusive – has thus far been conducted in denial of this truth. Instead, the matter has been the property, or plaything, of politicians, whose status and competence evidently diminishes with every passing year. It is clear, for example, that such fruitless negotiations and activities to date (over fifteen months now) would not sustain a week in the world of commerce or industry.

It is obvious that business has not been listened to thus far in the Brexit piece. It is now time to address that, and to have business continue to raise its voice until it is heard clearly.

Firstly, from a business perspective, let us not waste time and resources preparing for a so-called ‘no deal’. A no deal would be a straightforward disaster for UK business.

Take the simple fact of labour in our marketplace: The UK economy depends upon 2.5 million non-UK citizens to keep the wheels of our industries turning – right across the board; from farm labourers in Lincolnshire to managers, scientists and skilled technicans from Milan, Munich and Madrid. To attempt to suddenly amputate the flow of this human capital is not just madness, it will deliver a nonsensical and self-inflicted blow to our standards of living.

If we are to have any kind of Brexit, the better course of action by far is to work, judo style, with the energy of our so-called ‘opponents’ so that we both achieve the softest of landings for us both.

Business must continue to speak up and to articulate its needs and fears.

For this reason I urge all our members and constituents to raise the level of communications with our legislators and politicians, helping minimise commercial damage and disruption in the months ahead.

Many thanks

Dick Searle

 

Advertisements

Accentuate the positive

Dick Searle9smallAs the old year draws to a close there can be no doubt – to borrow from the old Chinese curse – that we live in ‘interesting times’. Our worldwide political, trade and economic turbulence is clearly set to continue and in these circumstances, business – our own packaging sector included – must most often nurture an instinct for fending for itself.

This background has, in part, been the trigger for the Packaging Federation to join lobbying forces this year with many like-minded bodies in the supply chain, most notably the Food and Drink Federation (FDF). Together we represent some 20% of UK manufacturing employment. It makes complete sense to bring our full economic weight to the forefront, to demonstrate the urgent issues in our supply chain, and to argue for policies that protect and serve our businesses, our society and country.

Over the coming twelve months I believe it also behoves us – and here I speak to all UK packaging businesses – not to turn our backs on the spectacle that often masquerades as politics. Instead – and perhaps counter to instinct – we should learn to walk towards the sound of battle and to practice the art of meaningful engagement with our legislators and democratic representatives.

I suggest that all UK packaging businesses could and should profit greatly from inviting their local MP to their place of business; opening up and maintaining a dialogue that embraces all the real and current issues; employment, competitiveness; trading and so on.

Rest assured that in these post-Brexit days there will be no shortage of talking points; jobs, legislations, tariffs, import/export, exchange rates and many other issues.

Also know that your MP will thank you for the meeting opportunity and for having reached out: A doorstep briefing and a some realpolitik facts from his/her constituency gives an MP ten times more value than any white paper or desk research. In addition, the photo-opportunity and the PR value are often most welcome.

Engaging with the political mainstream in this way enables local concerns to be shared. It also gives us an opportunity to remind politicians that the continuing health and development of our packaging sector is a key bellwether for our world as a whole.

It is simply a fact that effective and environmental delivery systems (packaging) for goods and services enable the continuing development and survival of humanity, distributing and preserving resources of all kinds.

Packaging has an essential social purpose to fulfill. At our best, therefore, we are a hugely innovative, well-invested, highly productive and fast reacting element that is part of the centre of myriad supply chains.

As we enter this year’s festive season and our uncertain future there are some signs of trepidation. We should, however, maintain plenty of confidence in our track record of innovation and in our ability to serve and prosper.

Warmest seasons greetings to you

Many thanks

Dick Searle

 

Packaging – Buyer appetite remains healthy

Nick Mockett of Moorgate Capital joins the guest bloggers at the Packaging Federation, here casting an overview over some Merger and Acquisition activities and trends thus far this year.

nicholas-mockett

The year 2015 was such a bumper year for M&A activity in the packaging sector that this year’s figures were always set to struggle by comparison. 2015 saw over US$35bn of deals whereas halfway through 2016 the corresponding figures were around $10bn.

Nonetheless, given the relatively modest economic growth throughout Europe, and the ongoing Brexit limbo, substantial deals have been done and substantial interest in European packaging – from both inside and outside the continent – remains.

Many North American companies are maintaining a very active watching brief. Europe’s packaging businesses are seen as stable, compared with the alternative of Emerging Markets.

Asia also shows no lessening of an appetite for possible acquisition activity in Europe. Slowing domestic markets there provide one reason. A continuing trend for Asian FMCG companies to buy established brands provides another clue.

The packaging sector is not necessarily in the forefront of this East-West movement but where brands and retailers go, for example, other sectors will follow. One of the Asian businesses we are currently working with, for example, is currently seeking to deploy €5bn in European Packaging.

Packaging businesses strong on innovation in materials and technology are able to increase IP and process know-how which can be leveraged through acquisition.

Plastic packaging, for example, is a case in point; making up about 50% of all packaging M&A each year globally. In Europe, for example, RPC Group, the leading player in rigid plastics, and traditionally strong in injection moulding technology, has continued to acquire rigid plastics businesses, such as Global Closures for €650m.

RPC also lately acquired British Polythene Industries for approximately £300m. BPI is a European leader in blown film technology – PE film that is converted into packaging and also number one in agricultural films such as silage wrap. This marks RPC’s first acquisition within the flexibles supply chain. Another deal Moorgate Capital is advising on in flexibles, again at the €300m plus level, is expected to complete in 2016.

Therefore, this will have been one of the most active years in European flexible packaging M&A. This reflects the fact that flexibles are a high growth segment and there is plenty of opportunity for innovation and differentiation which generally means superior returns.

As we head into Q4 2016 therefore, the year has already shown a fair few purple patches with enough evidence also to point to a European packaging sector that remains attractive to investors, and with the promise of significant trades to come.

Brexit – business-led solutions now needed

Dick Searle8smallFrom the outset the EU issues that truly mattered were always and only about business and the economy.

Sadly, the Brexit campaigners succeeded in getting over half the referendum voters to ignore these realities. The deed is now done and the milk is now well and truly spilled. And since business and markets are the essence of pragmatism it now falls to us to try and mop up the mess.

Just to be clear, there is no distinction here to be made between business large or small: I agree completely with my colleague Martin Kersh of the Foodservice Packaging Association who noted in the referendum aftermath that ‘the claim by Leavers that the result is a bloody nose for big business is outrageous.

Small businesses rely on the success of big business both directly and indirectly, the latter as result of big businesses’ and their employees’ expenditure.’

Business – all of it – creates the wealth of the economy and the country. The Brexit vote has now put the economy and the country at risk and for no good reason. We now need business to help us to row back from that position, and with some urgency.

The Packaging Federation is here to play its part. More than ever our companies need support and encouragement to play to their strengths and to do their very best on the world stage.

In many places today business is still greatly misunderstood and hugely underestimated. The evidence for this is seen in many instances of red tape and over-legislation. One opportunity in the current crisis may be to rationalise and cut away these disincentives to growth.

Our competitiveness will be key in the weeks and months ahead if we are to overcome the current malaise.

Many thanks

Dick Searle

 

Less interest and more common sense please

Dick Searle1smallMost of us I am sure are familiar with the old Chinese curse ‘may you live in interesting times’. The evidence of our daily politics and economics would suggest that our world is playing out this curse on a daily basis.

Political leaders most everywhere seem incapable of marshalling the facts of any matter in any sensible and straightforward direction. The confused muddle of our own Brexit debate makes that clear enough. As business, investment and other decisions are suspended pending the June 23 outcome, our debate is surely ‘interesting’ – but not in a good way.

To my mind, other events of recent weeks trigger reminders that our sector’s recent environmental and public perceptual gains continue to rest upon very fragile understanding from those in Government and politics.

The House of Commons Library, for example, recently issued a briefing paper on food waste: It made no mention of the role of packaging in preventing food waste. It gave plenty of detail, however, on so-called ‘packaging waste’. Given the Packaging Federation’s continuing presence in Westminster via our APPG group these oversights and inaccuracies are as dismaying as they are annoying.

Secondly, and contrary to all factual, economic and scientific evidence – the Deposit Return Scheme (DRS) lobby now appears to be gearing up for a fresh push in England. This scarcely seems credible in the light of the facts but the DRS arguments now need countering yet again.

Thirdly, the confusions and anomalies of the EU Circular Economy Package also continue to circle and threaten the industry right across the board and throughout the European economies.

In short, there are many gathering clouds threatening to hinder the effective pursuit of daily business. I am reminded that packaging needs our support as much now as ever, not least because the cultural default-setting clearly supports and promotes unscientific and wishful thinking.

It is not enough to note that our society deserves the politicians we get and their actions. Business leaders can be easily inclined to such passivity. However, now is the time for business to up its game with these issues and the political process if we are not to reap the consequences of our indifference.

We also seek a little more mindfulness and memory from those in the legislature: The fact of the matter is that packaging remains within the top ten UK manufacturing industries; provides significant and net environmental benefits to society, and contributes well over £12 billion annually to the UK economy. It needs nurture and promotion – not misunderstanding and threats.

Interesting times demand that common sense make its way to the fore. Alas, we also see that ‘common sense ain’t that common’. More of it has to be found in the coming weeks and months if we are to maintain a sensible course.

Many thanks

Dick Searle

Celebration – reflection – caution

Dick Searle1smallFrom the Packaging Federation perspective, 2015 turned out to be a very interesting year.

Our successes – Fresher For Longer work with schools; deepening recognition of the role of packaging, leadership and coordination work with litter – have all been well documented and have again been achieved against a diminishing but constant background hum of misinformation and, sometimes, disinformation.

On the positive side, we were delighted, energised and motivated by the application and talent shown by our shortlisted schools in the Fresher For Longer 2015 packaging challenge. As as long as our sponsoring companies and willing schools continue to play their part, the enthusiasm of our youngsters bodes very well for the role of packaging in keeping our precious food resources Fresher for Longer (FFL)

The rejuvenated topic of litter certainly benefitted from the energy and motivation at other end of the age spectrum. We now have a much better picture here, with many good things to look forward to; helped in no small part by the pioneering and creative energies of Trewin Restorick and his team at Hubbub.

After a period of indecision, faction and lack of direction, Minister Rory Stewart has now recognised the groundswell, and has committed the Government to setting a renewed and clearer course, starting this January 6, 2016 with a first meeting for all relevant parties. This is a great start – and look out also for Clean For the Queen, which should really rock the public richter scale in March 2016. One thing is clear. The litter agenda needs to stay ever present and this momentum needs to continue – year after year. The Packaging Federation will play its part to the full.

As said, despite these successes we continue to work very hard in order to counter misdirection and to check backward steps.

For example, EU environmental and industrial policy, indeed the EU project itself, continues to wobble on its axis – and certainly bears very careful watching in every regard. The debate on the EU Circular Economy, for example, has exposed a lack of realism and engagement within Brussels-based directorates; and this needs watching, challenging and correction at most every turn.

And this is a but a taste of things to come. My sense is that 2016 will herald a very challenging period ahead. Our manufacturing businesses – in the UK and Europe – face many clear and present dangers relating to resource scarcity, red tape, and matters of energy supply.

And therefore the Packaging Federation is satisfied that our remit – encouraging facts, awareness, consultation and dialogue – remains as urgent and needed as ever.

We thank you for your support and good efforts this year and we once again look forward to working with you through 2016.

May I wish you a very peaceful and very prosperous New Year.

Thanks again

Dick Searle

Attack is the best form of defence

We are pleased to present here our guest blogger – Trewin Restorick of Hubbub UK

TrewinAs the leader of an environment charity I am usually viewed with deep suspicion by the packaging industry. I can see them mental preparing their defence in readiness for an attack on how packaging is creating the UK’s waste mountain and is littering our high streets. But I am too long in the tooth for that game and have seen too much evidence on how packaging can help cut food waste and is only littered due to the actions of irresponsible citizens.

What surprises me is how poor the industry is at getting these messages into the mainstream. Commercial rivalries seem to undermine an ability to create a coherent story and consequently the industry is constantly reacting rather than generating media events.

I would suggest that now is the time to change the dynamic. The issue of food waste is rising up the nation’s agenda. Hugh Fearnley-Whittingstall’s War on Waste TV programmes have forced supermarkets to up their game. Already we have seen Sainsbury’s announce a £10 million investment in a consumer campaign called Waste Less Save More http://www.j-sainsbury.co.uk/wasteless which my charity is supporting. Tesco is seeking to stay ahead of its rivals and there have been a plethora of other announcements from Asda and Morrisons.

But where is the packaging industry in this debate? Social media is awash with the need to embrace wonky veg but there is nothing on the benefits of packaging or any consumer advice on how to use packaging to extend the life of food.

Similarly with litter, the charity I run Hubbub UK www.hubbub.org.uk has started to bring together a coalition of companies helping them to share the burden of addressing an issue which generates huge passion and anger amongst people. Our NeatStreets campaign https://www.youtube.com/watch?v=er3VhHtN_p0 has focussed on the importance of changing behaviour rather then attacking the companies whose packaging ends up on the street. The packaging industry has been more engaged in this campaign but once again there is far more the whole industry could do to focus the debate on behaviour change.

These two national trends give the packaging industry a fantastic opportunity to get their story into the public debate in a way that is positive and factually based. Grasping this opportunity will require greater collaboration, a willingness to dedicate some time and resource plus an ability to point to independent evidence to support the claims being made.

Missing this opportunity will result in the industry remaining on the defensive and susceptible to emotive attacks from concerned citizens. I would suggest that being proactive would be a far better approach.

Many thanks

Trewin Restorick

@trewinr

trewin@hubbub.org.uk