The UK’s food and drink export market has shown a decline in sales for the second consecutive year.
According to figures just released by Food from Britain, the international food and drink marketing consultancy, the value of exports dropped by five per cent in the last 12 months to £8.8bn.
However, this final figure is better than predicted and demonstrates that some of the UK’s key worldwide export markets are starting to recover, say the FFB.
This performance reflects tough trading conditions says Food from Britain, notably the continuing strength of sterling against the euro, increased retail price competition, manufacturing overcapacity in some food and drink sectors and limited recovery in beef exports, despite the lifting of the ban in most key European markets.
Exports to EU countries, which account for 63 per cent of all UK food and drink exports, were the worst affected showing a six per cent decline in 1999. In contrast, non-EU markets – severely affected by the Asian crisis in 1998 that saw a decline in sales of 14 per cent – have fared much better with exports dropping only three per cent against last year. Sales are coming back strongly in this region, with consistent increases recorded for the last six months.
The last quarter was particularly impressive with sales up nine per cent.
Despite total food and drink export markets showing a decline, many of the UK’s key traditional markets, as well as a number of emerging countries, bucked this downward trend. Sales were in fact up in over 80 countries across the world, claims the FFB.
Ireland, with an increase in sales of eight per cent, was perhaps the most significant as it has now overtaken France (down six per cent) as the UK’s number one export market, while other European countries such as Sweden and Finland also recorded increases of one and three per cent respectively. Sales to the USA increased impressively by ten per cent, while the most dramatic recoveries were seen in the Far East, with exports to the region up 14 per cent for the year.
Added value products again fared better than commodity based products, confirming the UK’s growing strengths in food and drink manufacturing. Sales of soft drinks increased by over 30 per cent in 1999, fruit juices by 14 per cent, prepared vegetables eight per cent, cheese seven per cent, general groceries six per cent and fish by three per cent. The lifting of the beef ban in key markets helped sector sales rise by 57 per cent to bring the total value to ound;18.4m.
“1999 was certainly a mixed year for food and drink exports, with sales to non-EU countries recovering well while exports closer to home declined sharply,” said David McNair, chief executive of Food from Britain. “The five per cent drop was certainly better than predictions earlier in the year, and the recovery in the last quarter in many of our key worldwide markets gives some hope for further improvements in the next 12 months. However, trading will continue to be tough, especially as sterling shows no sign of weakening relative to the euro, and there is real pressure on prices and margins.
“UK food and drink exporters have managed to maintain market shares in many of the countries in which they operate, ensuring that when the market does improve they are well placed to take maximum advantage. The companies that Food from Britain work with are committed to exporting their products.
“With intense and ever increasing competition for shelf space and tighter margins in the UK, they realise that for long term growth they have to widen their distribution. Despite these tough conditions, overseas markets still offer a great opportunity as UK manufacturers are seen as innovators, especially in the added value areas and in meeting retailer requirements for own label.”
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