UK food and drink exports reach £16.4bn as Brexit looms, says FDF report

07 Dec 2018 --- UK food and drink exports have increased by 1.8 percent to £16.4bn (US$21 billion) from January to September, compared to the same period in 2017, with exports of branded goods edging up. The food and drink trade deficit has narrowed by 1.3 percent as a result, now standing at -£18.0 billion (-US$23 billion), according to the latest analysis from the Food and Drink Federation (FDF). The news of the export success comes just ahead of the all-important parliamentary vote on the UK’s Withdrawal Agreement from the EU, which is scheduled to take place next Tuesday (December 11). The Withdrawal Agreement – which has the full backing of Europe – will go before UK MPs next week, make or break time for the Brexit deal that would avoid a no-deal scenario.

For the first time, FDF has made a national and regional export comparison across the UK. Comparative data indicates slower growth of food and drink exports from England to the rest of the world, compared with export growth rates from the other three nations of the UK. Comparative regional data shows that growth rates of food and drink exports in the North East and East Midlands lag behind England’s other regions, says the FDF.

Exports of branded goods grew by £35.2 million (US$45 million) to £4.3 billion (US$5.4 billion), up 0.8 percent.

Export growth to EU markets (+4.1 percent) was positive, while exports to non-EU markets declined (-1.8 percent), with the EU exports share growing to 62.1 percent.

All of the top 10 export products reported growth in January to September, apart from beer and salmon. The fall in exports of salmon, down 20.1 percent, is primarily a result in a fall in sales to France (-19 percent) and the US (-36.2 percent). In volume terms, this represents a decline of 16.6 thousand tons, which is equivalent to £94.3 million (US$120.2 million).

The top ten products exported from the UK are whiskey, chocolate, cheese, salmon, wine, gin, beef, beer, breakfast cereals and soft drinks.

“Despite the tumultuous times, UK food and drink exports continue to grow. These results record a very creditable performance across many product categories and destination markets. However, it’s clear that businesses must work even harder to deliver,” says Ian Wright, FDF Chief Executive.

“Access to high-quality market insight, advice and practical support is increasingly vital for success. That’s why the FDF is seeking collaboration with the Department for Environment, Food and Rural Affairs (Defra), the Department for Business, Energy and Industrial Strategy (BEIS) and the Department for International Trade (DIT). We believe that together we can deliver ambitious new methods of export support which will give us the tools to take on our rivals in the highly competitive global food marketplace.”

National and regional export comparison

The FDF says that when examining the most recent data on food and drink exports from the four nations of the UK, England has shown growth of just 6.2 percent, compared to the increase of 9.2 percent seen in Wales.

Similarly, FDF analysis of English regions reveals that the East Midlands and North East of England recorded the slowest growth rate for food and drink exports between 2015-2017, growing by just 2.6 percent and 0.8 percent respectively. These rates are much lower than leading export regions, with the South East showing growth of 8.4 percent and 7.2 percent reported for London during the same period.

The variation in growth across nations and regions indicates that there may be businesses in some parts of the country where export potential remains untapped, notes the FDF. Addressing this fragmentation in UK export growth, earlier this year the FDF submitted proposals to the UK Government. These included export proposals around market research, in-market support and an export portal.

The FDF is now in formal negotiations as part of the Government's Industrial Strategy activity to boost specialist export support with an aim of delivering ambitious long-term export targets.

Minister of State at the Department for International Trade, Graham Stuart, explains how important it is for UK businesses to push exports of British products.

“UK food and drink is highly-regarded across the world and I’m delighted that these latest figures from the FDF show such a positive increase in exports. It’s testament to the dedication and commitment to quality of UK businesses,” he says.

“We recently launched a new UK Export Strategy to clearly set out government support for businesses as we look to increase exports as a proportion of GDP from 30 percent to 35 percent. I would encourage all companies to make the most of this offer which includes finance through UK Export Finance, peer-to-peer support from our network of Export Champions,” Stuart concludes.

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