The UK Government’s announcement of tariff cuts to biscuits and chocolates is welcome news for consumers but even biscuits depend on a globally connected risk ecosystem, which is under considerable pressure.
UK Chancellor Rachel Reeves announced ‘Great British Summer Savings’ as part of wider efforts to reduce pressure on prices on products such as biscuits and chocolate, but a policy designed to reduce household costs also highlights how interconnected consumer demand and supply chain resilience have become.
Impact on UK Trade
Russell’s specialty risk intelligence shows that the UK imports a combined total of nearly $10 billion (£7.45 billion) of baked goods, which includes biscuits ($5.57 billion/£4.19 billion) and chocolate ($3.84 billion/£2.86 billion) a year.
But even a chocolate digestive biscuit comprises numerous ingredients in its making. For example, a biscuit would typically be made up of wheat, cocoa, sugar and dairy products. Russell data analysis reveals that the UK imports $4.9 billion (£3.6 billion) of dairy products, $763 million (£568 million) of wheat and $655 million (£487.99 million) of sugar annually, all of which go into the making of a biscuit. All these ingredients are connected in frail supply chains that can be easily broken.
According to the UK Government, the expected benefit to consumers is more than £150 million a year. The full list of products will be published next week, with business engagement commencing next week. Russell will be monitoring the full list of goods when it emerges and pass on any supply chain insights and specialty risk intelligence to clients and the markets once the information becomes available.
Comment from Russell
Chris Don, Head of Communications and External Affairs said: “Who would have thought that a product as simple as a biscuit could be a connected supply chain risk! Biscuit supply could be interrupted if a transport chokepoint materialises! The tariff cuts are well meaning and will be welcomed by biscuit addicts but let us hope that the wider system of international trade holds up under the strain of the conflict in Iran and doesn’t create a chokepoint so severe that that the goods are unable to reach consumers in the first place.”