Strong pound and BSE crisis 'crippling the food industry'

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The chairman of Nestlé UK yesterday warned that the strong pound and the fall-out from the BSE crisis were crippling the British food manufacturing industry.

The chairman of Nestlé UK yesterday warned that the strong pound and the fall-out from the BSE crisis were crippling the British food manufacturing industry.

Peter Blackburn, who is also president of the Food and Drink Federation, said the strength of sterling against the euro was the issue that had had the most serious economic impact on his sector. He said food manufacturers' exports had tumbled by more than £1bn between 1997 and 1999, while Nestlé was losing £100m of export sales a year.

"The effects of the relative weakness of the euro on UK exports in our sector is very real and a cause for concern," he told the Confederation of British Industry conference.

"And the problems which this creates cannot be left on hold until, as a country, we are ready to decide whether or not to join the single currency. We need to address the exchange rate problem sooner rather than later."

The fall-out from the crisis over "mad cow" disease was still hurting firms, he said. "Trust in the industry... has been eroded to the extent that advances in technology, such as GM, are now viewed not just with scepticism but with outright hostility."

He also attacked the "cumbersome bureaucracy and slow decision-making" of the European Commission.

* Small businesses have failed to respond to the Government's plea to prepare for the launch of euro notes and coins on the continent in 2002, according to figures published by the Treasury yesterday. Only 28 per cent of small firms have considered the impact the euro might have on their business according to a survey in April.