This week the government released the UK Budget

Food System Transformation
Written By Emma Victor-Smith

Louis Bedwell, Industry & Engagement Director, 28/11/2026

It does not rewrite food policy, but it does tighten several levers that shape costs, health and consumer behaviour. The overall picture is steady. Sugar regulation sharpens, business rates shift the balance between small and large operators and household budgets remain under strain.

Farming and land

  • No new agricultural schemes. Environmental Land Management continues unchanged. Most effects for farms come through wider business taxation rather than land policy.

Labour and supply chains

  • No new commitments on Seasonal Worker visas or Fair Dealing rules. Labour and contractual arrangements continue under existing Defra and Home Office policy.

Trade and regulation

  • No new trade measures. Work with the EU on reducing friction sits outside the Budget.

  • The Food Standards Agency will design a more consistent national model for large food businesses to reduce duplicated checks.

Soft Drinks Levy

  • The main policy shift. The sugar threshold tightens to 4.5 grams per 100 ml and milk based and plant based drinks with added sugar move into scope. Full implementation from 2028, with rate changes starting in 2026.

Business costs and consumers

  • Business rates support smaller retail, leisure and hospitality premises. Larger estates carry higher rated costs over time.

  • Income tax thresholds stay frozen which reduces real disposable income as wages rise.

Environment and health

  • More funding for environmental and water oversight through departmental settlements.

  • No additional healthy food or obesity measures beyond the levy.

Sector picture

  • Supermarkets under continued cost pressure and moving further toward automation and value.

  • Manufacturers preparing for sugar reformulation and tighter capital allocation.

  • Hospitality seeing support for smaller venues and weaker demand pressure for larger groups.

  • Specialist retail still navigating thin margins.

  • Logistics facing high property and fleet costs with continued consolidation.

Signals to watch

  • Consumer spending power.

  • Beverage reformulation and product architecture driven by the levy.

  • Automation becoming a core resilience strategy across the chain.

 Want to talk about a challenge you face, or explore any of these topics further? Let's chat!

Emma Victor-Smith
Previous

Anti-Trust Statement