UK food and drink exorts have rebounded in the first half of the year after a Covid-hit 2020.
According to the Food & Drink Federation, sales of UK food and drink to non-EU countries were up 13 per cent in the first six months, accounting for 46.6 per cent (£4.3bn) of all UK food and drink exports, driven by a return to growth in China, Singapore, Australia, Japan and the Gulf region.
The increase means non-EU exports are now almost back to pre-Covid levels.
In other non-EU markets, including in Central and South America, sales to some countries have doubled since H1 2020. The fastest-growing major export markets in the region were Colombia (+142.6 per cent), Mexico (+111.2 per cent), Chile (+105.4 per cent) and Brazil (+87.2 per cent).
Despite the return to growth in these countries, FDF pointed out that overall sales of UK food and drink are down £2bn compared to pre-Covid levels, because of a sharp drop in sales to the EU. A combination of the ongoing impacts of the Covid-19 pandemic, and new barriers to trade resulting from the new trading arrangements, have led to a fall in exports to the EU of more than a quarter since H1 2019.
Exports to nearly all EU member states fell significantly, including a loss of more than £500m in sales to Ireland, while sales to Germany, Spain and Italy are each down around a half since H1 2019.
EU imports hit by Brexit and Covid
UK imports of food and drink were down nearly 10 per cent in the first half of 2021 compared to pre-Covid levels, however imports from non-EU markets increased during the period. Imports from the EU were particularly badly impacted by the pandemic and the new trading relationship, falling nearly 15 per cent since 2019, a loss of £2.4bn.
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. Imports from the EU are likely to deteriorate further in 2022 after the UK’s full border controls are in place, FDF warned.
Dominic Goudie, FDF head of international trade, 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 £2bn 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.”
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