Overview of Covid-19 impacts from October to December 2020
Business and consumer confidence drops and restrictions continue
Following the relative optimism of the summer months, both business and consumer confidence dropped during October to December. From September onward, restrictions continued to increase across the UK and in important trading nations on the continent in response to the rising numbers of Covid-19 cases.
Some infections amongst the seafood processing workforce tested health and safety protocols implemented at the start of the pandemic but did not notably impact production.
Most larger vessels kept fishing, aside from Northern Irish mobile-gear vessels which were offered a further tie up scheme in October and November. Much of the small-scale fleet continued to face poor prices. Some persisted with direct sales. Others opted to utilise government support and tie up early, avoiding poor winter fishing conditions in November and December.
Heightened restrictions disrupted both domestic and international demand for British seafood. While retail sales remained strong to the end of the year, the re-closure of much of the foodservice market at home and abroad challenged businesses once more. Christmas is an important period for seafood sales across both retail and foodservice. Restrictions during the festive period saw record highs in retail and record lows across foodservice.
Global transport remained slower and more expensive through the end of the year. Strict limits and Covid-19 checks on exports to China further hampered global seafood trade during this period.
Market volatility and operating uncertainty throughout this period were further compounded by the fast approaching ‘end of the transition period.’ By October, businesses across the supply chain engaged in trade with the EU had shifted much of their focus away from Covid-19 and onto Brexit planning. Businesses worried about the possible impacts of the UK and EU not reaching a favourable trade agreement. There was a focus on planning for a worst case, ‘no deal’ scenario. By the end of the year, however, Covid-19 issues regained prominence.
The approval of several Covid-19 vaccines in November and December showed a path back to ‘normality’. Rising case numbers however drove all four UK nations to return to full lockdown measures by the end of December. This decision was largely driven by a new faster-spreading Covid-19 variant that was identified in southeast England in mid-December.
The new variant also caused further trade disruption ahead of Christmas. A number of European countries closed their borders with the UK until a testing scheme could be implemented to prevent the new variant surging on the continent. This closure came at a particularly bad time. Many businesses were in the midst of moving product for the Christmas market. Also anticipating bottlenecks at the border from 1 January, many were moving extra volume at the end of December.
The EU-UK Trade and Cooperation Agreement was signed on 24 December ensuring tariff free trade between the UK and EU. Many exporters were still concerned about disruptions at the border in the new year. Despite the agreement, additional paperwork and checks will be required under the new system.
Illustration of impacts from October to December
The following diagram provides a high-level overview of the direction and magnitude of Covid-19 impacts on different parts of the UK seafood supply chain from October to December 2020.
Shocks: Restrictions increased in the UK and important trading nations. Some shocks were similar to the first lockdown. Global transport and trade remained slower, more expensive and more unpredictable. Retail sales increased once more. Much of foodservice shut down but diversification helped many businesses fare better than during the first lockdown. Health and safety protocols in seafood processing factories were tested, but production was not notably impacted. Landings were depressed, with some fishermen choosing the certainty of government support over fishing in poor weather for volatile markets. The end of the EU-UK transition approached, compounding operating uncertainty.
- Landings – mild negative effect
- Aquaculture – mild negative effect
- Imports – mild negative effect
Production and Distribution
- Fish auctions – similar
- Logistics and Transport – mild negative effect
- Processing and Distribution – mild negative effect
- Foodservice – strong negative effect
- Retail – strong positive effect
- Exports – mild negative effect
- Direct sales – strong positive effect
As restrictions continued to increase during this period, the UK Government announced further support. The Coronavirus Job Retention Scheme (furlough) and temporary cut in VAT rates to support the hospitality industry were both extended.
In November 2020, uptake of the furlough scheme had a second peak. It supported over 750,000 and 1,000,000 jobs in the ‘wholesale and retail’ and ‘accommodation and foodservice’ sectors, respectively. In December, the furlough scheme supported over 15,000 jobs in the ‘agriculture, forestry and fishing’ sector.
According to the Seafish Covid-19 fleet survey results, 17% of respondents had used the furlough scheme by October. Overall 59% of respondents reported using at least one government support measure.
Additional support measures were also offered to the catching sector during this period. The Northern Ireland Producer Organisations successfully secured a second round of government support to assist the Northern Ireland fleet through two vessel support schemes.
The first was for static gear vessels and provided approximately £10,000 per vessel to cover fixed costs. These vessels were not required to tie-up so they could continue to fish for the Christmas market.
The second was for mobile-gear vessels and allowed them to claim up to 50% of their average earnings if they tied up from mid-October to end-November (six weeks). Up to 50% of the Northern Irish nephrops fleet reportedly took up this offer.
Finally, the Marine Management Organisation (MMO) re-purposed the balance of the European Maritime and Fisheries Fund (EMFF) for grants.
Half a million pounds was allocated to projects for ports or harbours impacted by the Covid-19 pandemic. £300,000 was set aside for fishing vessel owners or licence holders for health and safety improvements. Grants of up to £100,000 each were made available for existing projects that were aimed at mitigating impacts of Covid-19 at ports and harbours and bringing benefits to the local area.
Read more about Covid-19 impacts from October to December
Individual business impacts within each area of the supply chain are explained in more detail in the following webpages:
For further information on our review of Covid-19 impacts on the seafood industry contact: