Top five food exports to EU taking hit in January

That's according to trade body the Food and Drink Federation (FDF), based on the top ten food and drink categories exported to the EU.

The FDF listed (also in descending order) Luxembourg, Portugal, Ireland, Italy and Croatia as showing the biggest percentage slumps in terms of trade with the UK. The largest export sum lost in a single EU export market was recorded for Ireland - down £255.2m on last year.

The drop in overall export value equated to a £0.75bn loss compared to January last year. The drop in whisky exports equated to the most financial damage in a single category, with £66.5m lopped off international sales. Food exports to non-EU countries also fell by 11.1%.

The impact of COVID and stockpiling by UK businesses in the EU ahead of the end of the transition period were contributing factors in the losses, the FDF stated. But much of the damage was likely due to new non-tariff barriers faced by UK exporters and the collapse of groupage movements which had shut out many small and medium-sized exporters.

Imports also fell significantly in January 2021, driven by a drop of nearly 25% from the EU compared to January 2020, worth around £700m.

Imports from the majority of EU member states fell in January 2021. The EU market that registered the biggest sum wiped off import sales was the Netherlands (£242m), which remains the top importer of food into the UK.

Out of the ten largest import categories, the top five categories recording the largest drops in import sales were (in descending order): pork, chicken, beef, cheese and savoury snacks.

The FDF did highlight that not all of the damage could be attributed to Brexit. The impacts of the COVID-19 pandemic would be a major issue, particularly due to the continued closure of much of the UK’s hospitality sector.

The phased implementation of border checks was likely to mean that the full impacts of the end of the transition on imports from the EU would not be seen until 2022.

“It is extremely worrying that our exports to the EU have fallen by more than 75% in January," said Dominic Goudie, Head of International Trade at the Food and Drink Federation (FDF).

"Businesses face significant challenges when trading with the EU and small businesses in particular have been shut out because groupage distribution is not working. In the absence of solutions, EU exporters will face much the same difficulties when the UK’s full border operating model enters into force in 2022. 

“It is clear that the terms of the Trade and Cooperation Agreement (TCA) will not change and businesses face unavoidable changes to the terms of trade. However, there are opportunities to address the implementation of the deal. The EU-UK Partnership Council and its Trade Specialised Committees should be convened as a matter of urgency to put in place solutions that deliver the TCA’s aim of enhancing the ability of small businesses to benefit from trade.”