Exports in the food and drink sector have gone up in leaps and bounds so far this year – partly due to a jump in sales of salmon.
The Food and Drink Federation (FDF) has announced in its first quarterly figures of 2017 that sales of the fish went up 50% in value to £186.7m, with an increase in volume of 13%. As a whole the sector’s exports have gone up by 8.3% year-on-year to a record high £4.9bn.
This is clearly good news for one of the UK’s most dynamic industries and the FDF have credited the increase to better promotion of UK goods abroad and the weakening pound. With the pound 16% weaker against the dollar since the UK voted to leave the EU a year ago, importing UK goods has become a more cost efficient business overseas.
While leaping salmons will make the headlines, the industry’s success continues to be largely fuelled by sales of whisky of which there were £895.9m during the period. The rise in salmon sales is thought to be due in part to rising global demand and increases in price due to lice infestations that have impacted production globally. Scottish salmon has also become more cost-attractive in comparison to other salmon producing markets like Norway due to the weakening pound.
In general the sector is facing the same Brexit conundrum as most industries with sales to EU markets making up the lifeblood of its exports. But there are some encouraging signs that the industry may be leading the charge of a more Global Britain. Exports to non-EU markets continue to grow at a faster rate than sales to the EU, with a growth rate of 40% in South Korea particularly eye catching.
Ian Wright, Director General of FDF, said it was "pleasing to see non-EU exports performing beyond expectations".
The importance of ease of access to EU markets cannot be overstated though. Elsa Fairbanks from the Food & Drink Exporters Association said:
“Ease of access to EU markets will continue to be vital to our industry in future as many food and drink products are not suited to export to distant markets. Although we recognise the need to explore new opportunities, leaving the EU should not mean ignoring those we already have."
To put growth of exports to non-EU markets into perspective, the growth of sales to South Korea only actually amounts to £50m worth of business, while sales to Ireland – our most important trading partner in the sector – amount to £854m in the quarter.
While there are encouraging shoots of growth for global exports beyond the EU, maintaining the sustenance of sales into the EU is massively important for the industry.
