Food and drink exports to Europe fall by a quarter after Brexit

New figures have shown that UK food and drink exports to the EU plunged by almost a quarter in the nine months after Boris Johnson’s Brexit deal took effect, compared to pre-pandemic levels, with a loss of £2.4bn in sales.

Exports to big European markets were hit hard, with sales to Spain down by more than half (50.6 per cent) on 2019 levels, Germany by 44.5 per cent and Italy by 43.3 per cent, according to the Food and Drink Federation. Sales to the industry’s largest overseas market, the Republic of Ireland, were down by more than a quarter.

And industry leaders warned that the downturn could be “here to stay”, in a blow not only to Mr Johnson’s “global Britain” aspirations but also his plans to “level up” disadvantaged parts of the country.

The FDF said that the slump in sales could be blamed both on new barriers to trade created by Brexit and Mr Johnson’s Trade and Cooperation Agreement (TCA) with Brussels, and on the global Covid-19 pandemic.

But figures showed that UK sales of food and drink products to non-EU markets rose by 11 per cent in the first three quarters of 2021, suggesting that Brexit is to blame for the lion’s share of lost trade with Europe. Small and medium-sized enterprises (SMEs) were worst affected.

In total, UK food and drink exports were down £2.7bn (15.9 per cent) in the first three quarters of 2021, compared to the same period in 2019. The drop in sales to the EU totalled £2.4bn (23.7 per cent).

The trade organisation appealed for ministers to work constructively with Brussels to improve the operation of the TCA, which provides for tariff-free imports and exports of goods but introduces many non-tariff bureaucratic barriers to trade, compared with the arrangements the UK used to enjoy as an EU member.

FDF head of international trade Dominic Goudie said: “It is extremely disappointing to see how badly our trade with the EU has been affected, with our smallest exporters hardest hit. It is essential that the government works constructively with the EU to improve the implementation of the Trade and Cooperation Agreement to ensure that it works for small businesses, otherwise this downturn will be here to stay.

“The UK government’s recent announcement of plans to take forward the FDF’s proposals to set up a new Food and Drink Export Council and put in place new in-market support are welcome. It is vital that the UK government and devolved nations continue to work with industry to put in place a new model of partnership to support food and drink exporters.

“Food and drink, from farm-to-fork, is uniquely placed to deliver on the government’s levelling-up agenda, delivering jobs and growth in every part of the UK.

“However, our supply chains continue to struggle, particularly through a lack of available workers. Businesses want to help the government realise its ‘global Britain’ ambitions, but they need government to clear the obstacles and help them take advantage of new opportunities.”

According to the FDF figures, exports to China were up by 22.1 per cent, to Taiwan by 21.8 per cent, to the UAE by 18.3 per cent, Japan 10.6 per cent and Singapore 5.4 per cent. However these more far-flung markets make up a smaller share of UK exports than those in neighbouring European nations.

Global exports of whisky and salmon have started to recover from pandemic-hit 2020, with sales of both products up 21 per cent compared to last year, while soft drinks were up 11 per cent.

But all other major products, including beef (down 18.4 per cent), cheese (down 13.2 per cent) and pork (down 5.7 per cent) continued to decline.

Meanwhile, imports from the EU have also been badly impacted by Brexit, down nearly 11 per cent in the nine months to September compared to pre-Covid levels – equivalent to more than £2.5bn in cash terms.

Imports from the Netherlands were down by 19 per cent, from Ireland by 20.1 per cent and from Germany by 33.1 per cent.

The delayed implementation of Brexit import controls on products from the EU will have a further impact on the cost and availability of supplies of food and drink from the EU in 2022, including on essential ingredients and raw materials required by UK manufacturers.

John Whitehead of the Food & Drink Exporters Association said: “The much-needed bounceback for salmon, whisky and soft drink exports is a real boost for the industry.

“It’s also encouraging to see meat sales to ASEAN (Association of South East Asian Nations) countries rising driven by an increasing demand for pork.

“It is the SME producers of value-added products hit hard by both Brexit and the pandemic who continue to need support to take advantage of these opportunities.”