State of Industry Report Q3 2025
Topics
Confidence among food and drink manufacturers fell sharply to -60% in Q3 2025, down from -40% in Q2.
Uncertainty and lack of regulatory clarity are the main drivers of depressed confidence, with 90% of manufacturers feeling pessimistic or nervous about the Government’s upcoming Budget.
5 key takeaways
- The industry’s sentiment about the upcoming Budget is overwhelmingly negative, with 65% expecting further financial burdens and 88% concerned about the impact of additional taxes or business costs.
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More than two fifths (45%) are concerned about new policies that will negatively impact household finances and half (50%) are concerned about the risk of more burdensome regulation.
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With production costs having risen 5.0% in the last 12 months, food inflation has remained stubbornly high in 2025 and is forecasted to remain elevated through 2026.
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In response to the increased employment costs introduced in last year’s Budget, two thirds of businesses (66%) have already or will be reducing headcount, three quarters (74%) have had to pass on some costs to consumers, and almost a third (29%) reduced or cancelled plans to invest in the UK.
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FDF is calling for Government to restore business confidence by ensuring no further burdens are added in the upcoming Budget and partnering with industry on a long-term plan to drive £14bn growth and investment in the sector.
