UK food and drink exports have recorded their highest level of any first quarter, bolstered by value growth in shipments of salmon.
Exports of wine experienced volume growth of 13.8% as whisky, salmon and chocolate held their place as the three most important exports overseas.
Importantly, exports to countries outside the European Union (EU) grew at a faster rate than exports to the EU – 9.4% compared to 7.4%. Developing strong trading relationships with non-EU markets, as well as retaining trade with Europe, will play a key part in the UK’s economic strategy after it leaves the EU in two years’ time.
The three export markets that saw the greatest value growth were South Korea, up 40.3% thanks to strong growth in beer; Belgium at 37.3%, boosted by exports of wheat and barley; and South Africa, higher by 31.2%.
Ireland, France and the United States are the top three destinations for UK food and drink in terms of overall value.
The first-quarter figures follow strong export performance – in both the UK and Ireland – in 2016. The value of UK exports passed £20 billion for the year, while Irish food exports exceeded €11 billion for the first time.
Food and Drink Federation (FDF) director general Ian Wright said: “The growth of food and alcoholic drink exports we’ve seen in Q1 is very encouraging news for our industry. We want to work with Government to take advantage of increased demand for UK products overseas and the opportunities that leaving the EU is expected to create. We would encourage the new Government to look to Bord Bia (the Irish Food Board) as inspiration in creating an organisation to help turbocharge sales of UK food and drink globally.
“It is also very pleasing to see non-EU exports performing beyond expectations. As the UK leaves the EU growth in exports is hugely important to our sector. We hope that with the determination of businesses and the assistance of the new Government, we can open more channels and provide a further boost to the UK’s competitiveness on the world market.”
Elsa Fairbanks, director of the Food and Drink Exporters Association (FDEA), added: “The FDEA welcomes these good food and drink export figures. We would like to see Government further encourage exporting by ensuring producers have the skills and support to enter new, challenging markets post-Brexit.
“We must not ignore the importance of existing and very strong EU markets which still represent 65% of food and drink exports and this must be a priority as Brexit negotiations start. 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.”
Would Scottish independence change UK food and drink?
Two of the UK’s three largest export categories – salmon and whisky – are heavily reliant on Scotland’s contribution to the UK economy. So with the Scottish government signalling its intention for a second independence referendum, how would a breakup of the union affect the UK’s food and drink industry? [Find out more…]
The FDF warned that, while the fall in the price of the pound had helped to boost UK export competitiveness, currency weakness had also led to an increase in the cost of essential imported ingredients and raw materials.
This has resulted in the UK’s food and drink trade deficit increasing by 19% to £6.2 billion in the first quarter of the year.
The impact of weaker sterling on British exports is expected to be seen in the third quarter as companies negotiate new sales agreements with overseas buyers. In the aftermath of the UK’s referendum on leaving the EU, held last June, the pound crashed overnight from $0.67 to $0.73 and has yet to fully recover.
Ahead of the General Election on 8 June, the FDF has called upon the next government to recognise the strategic importance of UK food and drink and the huge untapped export potential among UK manufacturers. At present only 20% of food and drink manufacturers actively export and the FDF wants to work in partnership with government to scale up its provision of specialist export support for food and drink companies.
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