US tariffs have combined with ongoing pressure on sales to the EU to drive UK food exports to a near-9% decline in the first quarter.
Data released today (26 June) by The Food and Drink Federation (FDF) showed the UK's food exports volumes fell 8.9% in the opening three months of the year.
Export volumes for the first quarter were at the lowest level seen in the past decade, excluding the Covid-19 pandemic, the FDF said.
The US tariffs introduced in April last year weighed on the UK's food exports, with volumes down almost 46%, leading to a 28% drop in sales to £529.6m ($699.6m).
The UK's food exports to the EU fell 6.9% in volume terms. The FDF noted the value of exports "stayed broadly stable", dipping 0.2% to £3.4bn. Export volumes to Ireland dropped 6.3%. Volumes to France slid 5.8%.
The upcoming sanitary and phytosanitary (SPS) agreement between the UK and the EU is expected to "remove some of the additional trade friction" caused by Brexit, the FDF said.
Overall, the value of the UK's food-and-drink exports dropped 4.8% in the first quarter to £5.7bn ($7.5bn).
The value of the country's food-and-drink imports rose 2.6% to £16.3bn. US imports into the UK grew 11.5% to £419.5m, cutting the UK’s export surplus with the country by 69.3% to £110m, the lowest level since Brexit, the FDF said.
The trade body said the UK's proposed tariff suspensions on products such as chocolate, biscuits, and jams are expected to further American exporters.
Exports also fell to countries or trading blocs with which the UK has recently signed trade deals. According to the FDF data, export volumes to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) markets decreased 11.3%. Volumes to India, with which the UK has struck a free-trade agreement not yet in force, declined 16.6% in the first quarter.
Meanwhile, the FDF said the cost of ingredients and raw materials imported by UK food manufacturers was 38.6% above levels seen in January 2020 before the Covid-19 pandemic.
Karen Betts, the CEO of FDF, said: “The costs of producing food and drink in the UK are higher than in many competitor economies, from energy to employment and constantly changing regulation only adds to these.
“Government should suspend tariffs on ingredients rather than manufactured products, to lower the cost of producing food here in the UK and to help businesses keep prices down for consumers."
