Brexit – time for business to get off the fence

The former Foreign Secretary is well known for a certain style of buffoonery. A few weeks back, when informed of the increasing concerns of business about Brexit, he is reported to have simply responded ‘f**k business.’

This may, of course, have been another rent-a-quote, headline-grabbing moment from Boris Johnson. However, I fear it is symptomatic of a deeper malaise within the UK Parliament and the political system.

The month of June past saw British-based CEOs of Nissan, Siemens, Airbus, BMW and many other large UK employers all step forward and break their silence on this matter. These companies spelled out some detailed consequences – clearly and factually – relating to the current Brexit muddle. None of it was good news.

It is now high time for all UK businesses, including our own packaging sector, to step up the volume and make these economic facts of life even clearer and louder to our political representatives. It especially behoves our SME sector to articulate its fears and increased burdens at this time. Large employers most likely have relocation contingencies in place throughout the world. Our indigenous smaller companies have no such luxury between them and the wall.

Make no mistake; the costs of the Brexit vote are already piling up at the door of the wealth-generating hub of the nation; the part that pays for everything else. These costs, no doubt about it, will be catastrophic in the event of a no deal hard Brexit.

In addition, the packaging sector has to periodically contend with other kinds of political and economic ignorance, such as that shown last month by the chair of the Environmental Audit Committee who attacked our own PRN system and said that the system ‘should make producers pay to recycle their packaging…’

Their? The last time I looked, said packaging was in the hands of its owners – the consumers. Consumers are the engine and the cause and reason for business and growth – at least in free market societies.

However, the idea that consumersshould pay and be held responsible for their actions has yet to get any modern-day politician elected. And so the ignorance continues.

Ineffectual political systems and interests – in the EU and UK combined – have made an unholy mess of these issues and of the Brexit matter over the past two years.

In the hope that it’s not too late, businesses must now find their voices and must strongly lobby their MPs to put an end to the nonsense and to find a way through for all of us. There is much too much at stake to remain silent.

In a transparent circular economy we all pay

We hear a lot in these post Blue Planet days about the virtues and desirability of a circular economy; an economy in which we all play our part to reduce, re-use and recycle, thereby reducing our impact upon our shared environment.

By and large business accepts the broad principles of the circular economy; not least because the consumer – the ultimate driver of business – is a necessary and key part of the ‘cradle to cradle’ strategy. The circular economy is merely a pipe dream if the consumer is not properly equipped and motivated to consume, re-use and recycle in the appropriate manner.

However, and from time to time, old ideas, habits and fallacies keep reasserting themselves: The latest such instance to resurface is contained in the working papers of the EU’s Circular Economy Package, a measure intended to deliver a more resource-efficient future for Europe.

And yet the authors of the EU’s latest waste legislative proposals are gravely mistaken if they believe that their notions of Extended Producer Responsibility (EPR) will help rather than hinder their cause.

Firstly, the notion of Extended Producer Responsibility is at odds with a properly functioning Circular Economy. EPR implies that today’s consumers are entitled to take a ‘pass’ when it comes to bearing the true cost and economic consequences of circular economy measures.

Nothing could be further from the truth. For some time now I have been pointing out that a truly holistic economy spares no part of it and no one in responsibility. It is evident that we all produce and consume. Society’s production and consumption is a seamless weave. And ultimately we all ‘pay’ for both activities.

The text of the draft EU legislation, however, is believed to suggest that producers alone will be required to pay for up to 80% of new programmes and EU programmes and 50% for existing national programmes.

Perhaps the EU believes that it has caught the public mood. The current economic climate – in the UK and throughout Europe – sees all parts of Government sorely strapped for cash. Perhaps Brussels guesses that grass roots sympathies will line up in support of another tax on business. Maybe so, but business is business and these costs will simply be passed on.

Whether the retail industries will then succeed in passing on the pain to the consumer is currently debatable. UK Supermarkets for one are as price competitive with each other as ever. Suppliers may be stone-walled on increase and their margins further squeezed. Business will then suffer and consumers will then have less.

In any event, is it not time that the EU gave up splitting its circular economy in this manner and stopped scapegoating producers? A truly circular economy would involve very different scenarios and a new kind of political courage that has been in scant supply for too long.

We await the final draft of the Circular Economy Package with keen interest.

Many thanks

Dick Searle


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


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.


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