British food exports to the EU fell by £2 billion (€2.33 billion) in the first half of this year, according to the UK Food and Drink Federation (FDF), which described the decline as ‘disastrous’.
At the same time, increased sales to non-EU customers such as Australia and China are highly unlikely to compensate for the decline – a dent in the hopes of the British government of Boris Johnson that EU losses could be made up for by new trade deals.
According to the FDF, sales of beef and cheese suffered most, while two products – salmon and whisky – increased sales. The latter are both products primarily from Scotland, where 62% of citizens who voted opposed Brexit and where polls indicate that a narrow majority would now like to gain independence and rejoin the EU.
“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,” said Dominic Goudie, head of international trade at the FDF.
“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.”
John Whitehead of the Food & Drink Exporters’ Association (FDEA) blamed other factors on the decline in sales to the continent.
“So many factors continue to impact 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,” he said.
“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 importers looking for alternative suppliers, contributing to the ongoing decline in both UK exports and UK jobs.”
The FDF figures show gains by only two product types. In other sectors, the worst-affected are beef, down 37%, cheese down 34% and milk and cream down 19% in the first half of 2021 compared with the first six months of 2019.
Among the markets showing the greatest decline are Spain (54%), Italy (50%) and Germany (49%).
Since January this year, exporters have been faced with extra paperwork and administrative costs as a result of the Brexit deal. Another problem is the so-called physical sanitary and phytosanitary (SPS) checks the UK escaped during its membership of the EU, which now lead to lorries at Channel ports having to unload fully or partially if there is any problem with their paperwork.