Food and drink recruitment plans hit by Brexit concerns

More than two-thirds of Scottish food and drink firms say their recruitment plans have been hit by Brexit, according to a report published today.

Despite Brexit woes, food and drink firms plan to create 18,000 jobs over the next five years. Picture: Robert Perry

The industry is also actively looking to develop new markets outside the European Union (EU) as Brexit looms, the Bank of Scotland report reveals.

Sign up to our daily newsletter

The i newsletter cut through the noise

Some 42 per cent of firms surveyed for its annual food and drink report cited leaving the EU as their biggest worry over the next five years with 67 per cent saying it had affected recruitment plans, although rising labour costs (44 per cent) are seen as the most significant challenge for the industry.

The number of firms citing a lack of skilled labour as a challenge also grew year-on-year from a quarter to a third.

The survey findings come just weeks after a report found that nearly a third of British food and drink businesses have had non-UK EU workers leave since last summer’s Brexit vote, raising concerns about skills shortages.

However, the Bank of Scotland report also found that 54 per cent of companies still plan to create jobs over the next five years, up from 36 per cent last year.

The sector plans to create 18,000 jobs over the next five years, up from the 14,300 predicted this time last year.

The survey found six out of ten companies were investing in or planning to secure new international customers in the next five years. A fifth said they planned to export for the first time in the next five years, with the figure rising to almost a third among small and medium-sized businesses.

Western Europe remains a key market, with 61 per cent of firms planning to target the region in 2017, up from 48 per cent in 2016.

The survey of 100 companies found there has been an increase in interest in all areas, most notably South America, with 57 per cent of firms targeting the region, up from 32 per cent, followed by the Middle East.

However, Jane Clark-Hutchison, regional director of Bank of Scotland, said that despite challenges, the report showed the industry “remains robust in the face of economic and political uncertainty”.

“With a global reputation for quality, the sector enjoyed a record year for exports last year and, buoyed by the depressed pound, many are now planning to grow not just in Europe but across a number of overseas markets,” she said.

“Meanwhile, despite facing headwinds around the availability of skilled labour at home, the sector expects to create more than 18,000 new jobs over the next five years and is investing in the skills and development of existing staff to make their businesses more productive.”

James Withers, chief executive of Scotland Food and Drink, said: “It is great to see in this report that our Scottish food and drink businesses remain hugely ambitious, with 61 per cent of businesses looking to develop in new markets.”