UK food industry facing export challenges, FDF warns

UK food industry facing export challenges, FDF warns

UK industry body The Food and Drink Federation (FDF) has revealed exports of food and drink fell in the first half of the year for the first time since 2015.

It said the country's exporters are now facing a "huge challenge" after food and drink shipments declined 13.8% to GBP9.7bn (US$12.4bn) from a year earlier.

Exports to all but three of the UK's top 20 overseas markets dropped, with sales to China (+0.3%), Canada (+6.7%) and Norway (+46.9%). Of the UK's top ten export product categories, only pork saw positive growth (17.5%) with sales of GBP300m, largely driven by demand from China, which purchased GBP132m worth of UK pork.

Analysis by UK advisory firm KPMG, cited in the FDF's report, highlighted that differing markets are at varying stages of the Covid-19 lifecycle. China is currently experiencing a period of growth, whereas other nations are in recession, KPMG said.

But the possibility of the UK closing out the post-Brexit transition period at the end of this year with no trade agreement in place with its former European Union partners is also a concern.

Dominic Goudie, head of international trade at the FDF, said: "A fall in exports in the first half of 2020 demonstrates the huge challenge currently facing UK food and drink exporters. 

"We also have serious concerns about our access to existing EU trade agreements, with more than GBP1.7bn of UK exports at risk where continuity deals haven't been agreed."

However, he remains optimistic about new opportunities emerging from new trade deals such as the one recently agreed by the UK and Japan.

"There remain many opportunities overseas as we navigate our way through economic recovery, strengthen our resilience as an industry, and build relationships through new future trade agreements such as with Japan - the world's biggest net importer of food and drink," he said.

"Looking ahead, it is vital that we continue our work with government and industry partners to deliver sustainable export growth over the next few months and beyond the end of the transition period in January 2021 to ensure our industry has the support it needs."