It is fair to say that nobody expected FMCG policy to be front-and-centre of an election campaign dominated by economic growth and immigration, but as the UK closes in on polling day, what could be in store for the sector?

With a recent IPSOS poll estimating Labour could win 453 seats, it is as certain as things can be in politics that Keir Starmer will become the next Prime Minister, with the bookies overwhelmingly backing a majority government. With this relative comfort, Starmer opted to last week publish a broad brush ‘fully costed’ manifesto consisting almost entirely of existing pledges.

More stick than carrot for HFSS?

From an FMCG perspective Labour’s Shadow Health Secretary, Wes Streeting, has long advocated for tighter HFSS regulation to address preventable health conditions and reduce the burden on the NHS – previously pledging to “use the heavy hand of state regulation” to improve public health.

With that said, perhaps Labour’s manifesto is only the tip of the iceberg. The key headline was a commitment to ban the sale of energy drinks to under-16’s – a pledge dropped by the Tories over fears of reneging to a nanny state, despite many UK retailers already enforcing a voluntary ban. Other policies of note include banning junk food advertising to children, restricting the advertising of vapes, and a continuation of Sunak’s plan to create a smoke-free generation. Little detail on how these would be implemented was included.

An encore for the King of Leon?

There have been whisperings around Westminster that Labour will revive Henry Dimbleby’s National Food Strategy, which would leave Starmer with a fine balancing act between incentivising healthier lifestyle choices and mandating measures which could drive up food inflation. Streeting himself has pledged to ‘steamroller’ the food and drink industry with measures to tackle HFSS and ultra-processed foods (UPFs) – assuming a Labour victory, Streeting will certainly be one for the watchlist for promotion during any reshuffle.

Beer, wine and Number 10 (again)

A promise by Keir Starmer to hold one fiscal event per year will provide light relief for the UK’s beer, wine and spirits industries, who continue to live budget-to-budget on excise duty regimes. This includes a raft of reforms announced in 2023 (coming into force in Feb 2025) to tax all alcohol by ABV which presents significant challenges for the wine industry (mainly SMEs and importers), who face the burden of preparing for 29 new tax bands.

Despite no pledges to freeze duties making their way into the manifesto, both Starmer and Shadow Chancellor Rachel Reeves have hinted support for a freeze to beer duty as part of the party’s plan to breathe new life back into the UK’s high streets. As we’ve come to expect with Reeves in charge of the coffers, this support doesn’t come without the caveat that anything in a future Finance Bill must be within strict fiscal rules.

Defra – a department in flux?

Perhaps most worryingly for businesses seeking clarity over the direction of travel for recycling reforms – including Deposit Return Schemes (DRS), Extended Producer Responsibility (EPR) and Packaging Recovery Notes (PRNs)– is the distinct lack of detail on waste and resource policy. The only nod coming in the form of a generic ambition to reduce waste by moving to a circular economy.

It is no secret that Defra has been struggling to progress its waste and resource reforms, and it seems likely the department is earmarked for its own reforms under a potential Labour Government. While there is a clear opportunity to engage with a party which hasn’t yet formed a concrete position, there is the risk that new impetus in the department could lead to rash decision-making by Labour’s policy team.

As we await the result of July 4^th, businesses across the FMCG sector should use the period to align their strategy and messaging to Labour Party priorities, preparing to engage by providing pragmatic solutions and offering front-line business insights into the impacts of specific policies.

To speak to our FMCG sector specialists about how we can support your business during this year of political change, please contact Michael Broughton (michael.broughton@grayling.com).