UK food and drink sales down by £2 billion
Sales of UK food and drink to non-EU countries were up 13%, accounting for 46.6% (£4.3 billion) of all UK food and drink exports in the first half of 2021.
That’s according to the Food and Drink Federation (FDF) which has said that the sales were driven by a return to growth in China, Singapore, Australia, Japan and the Gulf region.
In other non-EU markets, including in Central and South America, sales to some countries have doubled since the first half of 2020.
Fastest growing export markets
According to the FDF, the fastest growing major export markets in the region were Colombia (+142.6%), Mexico (+111.2%), Chile (+105.4%) and Brazil (+87.2%).
Despite the return to growth in these countries, overall sales of UK food and drink are down £2 billion compared to pre-Covid-19 levels, because of a sharp drop in sales to the EU.
Exports to nearly all EU member states fell significantly, including a loss of more than £0.5 billion in sales to Ireland, while sales to Germany, Spain and Italy are each down around a half since the first six months of 2019.
Imports of food and drink
UK imports of food and drink were down nearly 10% in the first half of 2021, compared to pre-Covid-19 levels, however, imports from non-EU markets increased during this period.
The loss of UK exports to the EU contributed to reduced demand for EU ingredients for use in UK manufacturing, while import substitution by UK manufacturers and retailers also had an impact.
According to the FDF, imports from the EU are likely to deteriorate further in 2022 after the UK’s full border controls are in place.
Products of animal original were heavily impacted, with a large fall in imports of pork (-19.6%), cheese (-17.6%) and chicken (-17.9%).
Dominic Goudie, head of international trade with the FDF, said: “The return to growth in exports to non-EU markets is welcome news, but it doesn’t make up for the disastrous loss of £2 billion in sales to the EU.
It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support.
“At the same time, we are seeing labour shortages across the UK’s farm-to-fork food and drink supply chain, resulting in empty spaces on UK shop shelves, disruptions to deliveries and decreased production.
“Unless steps are taken to address these issues, the ability of businesses to fulfil vital export orders will be impacted,” Goudie stressed.
John Whitehead, Food and Drink Exporters Association (FDEA), added: “So many factors continue to impact on the drop in value of UK food and drink exports, with supply chain challenges and the inability to connect face to face with customers adding to the difficulties.
FDEA’s bespoke support to its member community is a valuable resource to identify new opportunities and accelerate new market entry. It is therefore pleasing to see growth in sales to non-EU countries.
“However, this in no way replaces the loss of £2.2 billion sales to the EU since 2019. There is growing evidence that the complexity of trading with the EU has led to businesses moving operations into Europe and of importers looking for alternative suppliers, contributing to the ongoing decline in both UK exports and UK jobs,” he concluded.