Commercial Awareness Update – W/C 29th November 2021

US Oil Crisis: Covering Up The Cracks With Paper?

The US government has announced that it will release 50m barrels of oil from its 600m reserve. To put that in perspective, the global daily oil consumption is roughly 100m barrels, hoping to reduce the cost of petrol, which have hit a seven-year high of around $3.40 a gallon and 60 per cent higher than this time last year. The move comes at a susceptible time for US politics, with midterm elections in 2022 and climate change, with the recent COP26 conference, which outlined how global net-zero can be reached.

Inflation has hit a 30 year high of 6.2 per cent in the US. This number will impact the middle classes and below the hardest as food and housing costs have crept up, and the rise in oil prices is believed to be a significant contributing factor to this. This has led to Biden’s approval rating slumping. Although the release of oil reserves, a fossil fuel, is a backtrack on Joe Biden’s promised legislative plan of having climate change central to US policy may infuriate some supporters, it is believed the move will benefit the President’s results next year. Republicans have accused Democrats of the price rise to pay for their spending, such as the $1tn infrastructure package. Republicans have also criticised Biden for reaching out to OPEC Plus to ramp up oil production, whilst domestically he has tried to suspend oil and gas lease sales on US public lands.

Despite pushing OPEC Plus to boost oil production, the production will not fill the oil hole until late 2022, meaning the release of oil reserves is for immediate impact as the US fuel demand has increased as a time where oil prices as also increased. The move has led to question marks over the meeting next week by OPEC as they may now halt the increase in production. However, the US will not act alone; China, India, Japan, the Republic of Korea and the United Kingdom will also release oil from their strategic reserve in the first coordinated effort since the Libyan Civil War in 2011, where significant supply was lost.

Although releasing oil reserves remains a short-term solution to a global oil crisis, the long-term issues surrounding oil supply and trading will remain. Hence, the price of the barrel will remain volatile and exposed to geopolitical, socioeconomic and supply factors.

You can read more about it here, here, here and here.

Written by Harry Gadsby

What Does the Autumn Budget Mean for UK Businesses?

The Autumn Budget has presented a number of welcome changes, drafted with a transparent focus on driving economic growth, increasing the tax take, and, in turn, rebalancing the economy in the wake of the pandemic. While some have described the proposed changes as no more than a sticking plaster to help address the rising costs of living, the Budget will offer relief for some businesses if they take full advantage of the fiscal incentives designed to aid their recovery as the economy rebounds.

For UK businesses specifically, some of the more notable policies are outlined below:

• For retail, hospitality and leisure businesses, a new 50% business rates discount up to a maximum if £110,000 has been announced. It is hoped these changes will help reignite the high street, as retailers are encouraged to feel more confident about investing in improvements to their properties (e.g. identifying digital requirements and the implementation of technology) while being given the opportunity to circumvent business rates penalties. It is worth mentioning that this policy is predicted to help 30,000 SMEs, and since they contribute to 50% of annual turnover for the private sector, it is hoped employment opportunities will increase, industry and business will expand, and the economy will be stabilised.
• The Annual Investment Allowance will remain at £1 million until March 2023 (instead of dropping to £200,000 as was previously planned). It is hoped businesses will respond with bolstered levels of certainty, encouraging them to veer away from minimising risk and move towards planning ahead to make investments over the next 18 months. This comes at a critical time where many businesses are concerned about rising costs and supply disruption, leading to instability that has perturbed their confidence to invest, borrow, grow and hire.
• An increase in the National Living Wage to £9.50, while welcomed for workers, may represent another cost challenge for SMEs. The rationale for this is that small-scale employers are pressured to meet the higher wage, in turn potentially impacting their hiring strategies and even forcing redundancies. Some commentators have expressed this may set the overall business environment to pre-Budget levels, and called for the extension of the small business Employment Allowance to support those who will struggle to afford to maintain jobs. This is a compelling argument to make given that across the board costs for SMEs are on the rise, from energy bills and recruitment to taxes and shipping.

Written by Theo Budgen

Natasha’s Law: A lesson for the need for pro-active legislation

Natasha Ednan-Laperouse, 15, tragically died in July 2016 after suffering a fatal anaphylactic shock following the consumption of a baguette bought from a Pret a Manger airport outlet on her way to a holiday in Nice. The baguette contained sesame seeds which Natasha was severely allergic to, and despite both her and her father conducting thorough checks of the baguette and finding no indication of sesame seeds, it later transpired that the baguette contained the allergen fatal to Natasha. 

Businesses, such as cafes and delis, were under no obligation to provide a complete list of allergens on products processed on their premises, and Natasha’s inquest in September 2018 exposed this loophole. Natasha’s parents, Tanya and Nadim, set up the Natasha Allergy Research Foundation, tirelessly campaigning to raise awareness of the impact of allergens and enforce a change in legislation to enhance the safety of consumers with allergies.

As a result of the campaign by Natasha’s parents, a consumer food consultation was commissioned in January 2021, putting forward four proposals as a means of implementing new changes and as follows:

1. Full ingredient list labelling.
2. Allergen-only labelling.
3. ‘Ask the staff’ labelling.
4. Promoting best practices to businesses.

With an overwhelming majority of 70%, the participants voted full ingredient listing would be the most effective way to help prevent tragic incidents such as Natasha’s, with the Food Standards Agency further backing its implementation.

The Food Information (Amendment) (England) Regulations 2019, otherwise known as Natasha’s Law, came into force on 1st October 2021 and affected businesses of all sizes. This Regulation amends the Food Information Regulations 2014. The law now requires complete ingredient lists to be provided with the 14 major allergens, including celery, eggs, crustaceans, milk, and tree nuts, to be indicated on individual food products processed and packaged on the same business premises. The labelling enforcement preserves lives, encourages consumers affected by allergies to place greater trust in the food industry, and affords a greater choice for consumers with allergies, all of which only promotes trade in the sector.

However, the enactment of Natasha’s Law has drawn some criticisms. Kate Nicholls, the Chief Executive of UK Hospitality, stated there is a concern that ‘full ingredient labelling is going to prevent the kind of dialogue we need to promote. Some smaller businesses may struggle with the unwieldy new legislation, and it is almost certainly going to lead to much less choice for customers’. She further stated, ‘there is also a risk that the new measures, which will not circumvent cross-contamination and will be open to mislabelling, will only promote a dangerous reliance on labelling’.  

Furthermore, Natasha’s Law does not apply to restaurants as such businesses cater for non-packaged foods. The same applies to takeaways as they are classed as restaurants. Currently, such businesses need only inform a consumer of allergens either verbally or in writing, the latter through displays or menu amendments for example, as per the provisions of retained Regulation (EU) No 1169/2011 of the European Parliament and of the Council.  

What is not guaranteed is the strict adherence to those provisions, as evidenced in the case of Shahida Shahid who died in January 2015 after consuming a meal at a restaurant. Shahida had previously made known her allergies to the restaurant staff when ordering her meal, and the staff informed her that the dish was ok for consumption. Unfortunately, the dish contained buttermilk which Shahida was allergic to, causing her to go into anaphylactic shock and die shortly after. Furthermore, there is the tragic death of Owen Carey, who was out celebrating his 18th birthday in April 2017, who, after informing restaurant staff of his allergy to dairy, was served a meal covered in buttermilk, leading to his death shortly after.

It is understandable that smaller businesses will be more adversely affected by the enactment of Natasha’s Law, however, the change affords all businesses a 2-year implementation period. During this period, businesses can foremost train their staff in understanding why Natasha’s Law came into effect and the inevitable consequences of non-adherence. Businesses must also train their staff to ensure they can offer accurate allergen information to consumers. Food outlets will have ample time to invest in technology that facilitates accurate and efficient labelling. Finally, the Food Standards Agency will continue to guide businesses on dealing with allergies through the ‘Easy to Ask’ campaign.

Natasha’s Law, although it may be classed as an enactment too late for Natasha and the countless number of unknown cases who have suffered the same tragedy, is a welcome change to the food safety standards. As Heather Hancock, the Chairman of the Food Standards Agency, states, ‘we want the UK to become the best place in the world for people living with food hypersensitivities’. Whilst it is impossible to eliminate the risks, we believe this change will mean better protection for allergic consumers’. 

Natasha’s Law has done just that.

It feels macabre to thank Natasha’s parents for their beloved daughter’s ‘sacrifice’, which transpired to be the catalyst needed for a desperately urgent change. But thank them we must and should. Because of Natasha, Tanya and Nadim, the world feels a much safer place for the estimated 1 in 4 people in the UK who suffer from allergies in varying degrees and the estimated two million-plus living with diagnosed food allergies.

Written by Aqua Koroma