FDF & Santander UK call for greater long-term support for exporters amid “disappointing year”

21 Apr 2021 --- Export volumes of the UK’s top tier food and drink exports – whiskey, chocolate and cheese – saw a decline amid the COVID-19 pandemic. However, industry watchers report buoyancy for pork and breakfast cereal sales during the first year of the global crisis. 

Santander UK and the Food and Drink Federation’s (FDF) Industry Report reveals that Britain’s exports fell by 9.7 percent in 2020 when compared to 2019, with the total value falling to £21.3 billion (US$29.7 billion). 

However, a widespread easing of pandemic restrictions coupled with businesses stockpiling products in the EU before the end of the Brexit transition period meant that national exports fell by only 1.7 percent in Q4 2020.

Exports to both EU and non-EU markets fell by 8.0 percent and 12.1 percent, respectively. Most of the top 10 products exported by the UK also fell due to the pandemic. 

“As the UK’s largest manufacturing sector, food and drinks make a unique economic and cultural contribution in every region of the UK,” says Ian Wright, chief executive of the FDF.

“Now we look forward to the government demonstrating its commitment to working in partnership with us to accelerate growth in our sector.”

Export volume decline for top products
The new report comes at the heels of a previous FDF analysis that revealed F&B exports in the first half of 2020 fell for the first time since 2015.

Exports to both EU and non-EU markets fell by 8 percent and 12.1 percent, respectively.

Exports to both EU and non-EU markets fell by 8 percent and 12.1 percent, respectively. Most of the top 10 products exported by the UK also fell due to the pandemic.

This includes a decline in volume of the UK’s top three products: whisky (-13.7 percent), chocolate (-2.3 percent) and cheese (-7.5 percent).

Despite this, pork sales to EU and non-EU markets increased in volume by 6.2 percent in 2020, with a total value of £629.7 million (US$878 million). 

Sales of breakfast cereals also increased in volume by 12.6 percent, with the top market being the Republic of Ireland.

“While the food and drink industry didn’t escape the effects of the pandemic and Brexit last year, it certainly didn’t let them beat it,” says Andrew Williams, head of food and drink sector, Santander Corporate & Commercial Banking. “There is much scope for growth in 2021.”

Growth opportunities 
As the UK forges its new identity as an independent trading nation following the end of the transition period, significant growth opportunities remain for UK food and drink exporters, both in the EU and further afield.

Significant growth markets detailed in the report include the US, Canada, Australia and New Zealand. The FDF has also previously hailed increasing export sales to China and UAE as a “golden opportunity.”

The UK’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the third-largest free-trade bloc in the world by GDP, will also present new opportunities for food and drink exporters if it is approved.

The FDF and Santander UK highlight recent initiatives from the UK government to help exporters facing both pandemic and Brexit headwinds, including the creation of four Trade and Investment Hubs by the Department of International Trade (DIT).

Last month, the UK delayed its post-Brexit border checks on certain EU goods by six months to give businesses more time to prepare for the full impact of the transition.

Establishing an export council
In spite of these growth opportunities, the FDF-Santander UK report flags that more can still be done to ensure UK F&B exporters have all the support they need. 

“Government should adopt the export proposals produced and agreed upon by industry members of the Food and Drink Sector Council that were also backed in the recent report published by the Trade and Agriculture Commission,” it maintains.

These include establishing a Food and Drink Export Council to drive UK-wide collaboration, and addressing the “critical gap” in specialist support for the F&B export sector that still exists in England.

“The FDF continues to work in close partnership with the government and other industry bodies to ensure our sector has the support that is needed to fulfill our untapped export potential,” Wright remarks.

“These initiatives are vital to help create new jobs and drive the quick return to growth that is essential to strengthen resilience across our industry.”

Edited by Benjamin Ferrer