The UK’s food and drink exports have declined sharply since before the Covid-19 pandemic, in large part due to plummeting sales to the EU.
Figures from the Food and Drink Federation (FDF), released today (2 September), show that exports to the EU are down more than a quarter (27.4%) in the first half of 2021 compared to the same period in 2019.
This included a £0.5bn drop in sales to Ireland, with exports to Germany, Spain and Italy also down by around a half.
According to the Grocer, overall industry exports were down 4.5% to £9.2bn in the half of 2021 compared to 2020, and down more than 17% from the first half of 2019.
Post-Brexit
Since the end of the transition period on New Year’s Eve, when the UK left the EU customs union and single market, exporters have been faced with new rules for sending goods to the EU.
This has included the requirement to complete declarations and, for exporters of animal-origin products, new rules around completing export health certification.
John Whitehead, director of the Food & Drink Exporters Association (FDEA), said the drop in exports to the EU was partly a result of this added “complexity”.
“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 said.
Non-EU growth
Despite the hit to EU trade, UK food and drink exports increased by 13% and now account for almost half (46.6%) of the UK’s sales in the sector.
The fastest growing export markets for the sector included Colombia (+142.6%), Mexico (+111.2%), Chile (+105.4%) and Brazil (+87.2%).
Specialist support
Dominic Goudie, the head of international trade at the FDF, welcomed the growth in non-EU exports but said the plunging EU sales showed the industry needs “additional specialist support”.
“The return to growth in exports to non-EU markets is welcome news, but it doesn’t make up for the disastrous loss of £2bn in sales to the EU,” he said.
“It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support,” he added.
Import challenges ahead
Imports followed a similar pattern but to a lesser extent, with food and drink from the EU down nearly by nearly 15%.
However, while EU controls on British exports were introduced straight after the end of the transition period on 1 January 2021, British controls on EU goods have been introduced in phases.
Under the UK’s Border Operating Model, export health certification will only be required for EU goods entering Great Britain from 1 October, while frontier declarations won’t be required until 1 January 2022.
Wider trend?
While UK exports to the EU in general plummeted in the months following Brexit, there has since been a partial recovery, coinciding with the economy’s re-emergence from pandemic-related lockdowns.
Overall trade with the EU is now higher than it was at this time last year, according to City AM.