UK exports state of play
The UK’s food and drink sector export value has seen a 2% fall year-on-year, according to the most recent FDF trade snapshot.
It reached just shy of £25bn, with only pork and cheese growing in both value and volume.
Meanwhile, Ireland became the UK’s first ever export market to reach £4bn, increasing by 6% and highlighting its significance within the trade environment. Imports also rose by £200m, driven by a large increase in cheese, savoury snacks and chocolate.
However, the Federation is worried that the rollout of mandatory ‘not for EU’ labels could be detrimental to Great Britain and the Island of Ireland supply chains. This follows similar concerns from the Cold Chain Federation last week, which issued a warning to Defra Secretary Steve Barclay over the unintended consequences new rules, including not for EU, could have on the UK market.
“It’s baffling why the government would want to implement something so damaging, that will reduce investment, push up prices for shoppers, whilst delivering a real blow to our exports just at the time when our businesses need more support,” said the FDF’s director of industrial growth and sustainability, Balwinder Dhoot.
The FDF estimate that the implementation of the new rule will cost the industry between £150m-£200m.
The report also flags the decline in non-EU exports, which have dropped by 6% to £10.4bn.
“There are better solutions, including digital ones, which businesses support. We’re urging the government to remain open to these rather than imposing their own, rather analogue, and backward-looking proposals,” added Dhoot.
The FDF also believes that free trade agreements (FTAs) will help boost world exports and is urging the Government to take a ‘balanced and careful approach’ with new FTAs such as India.
Moreover, to ensure continuity, it is asking that negotiations are resumed with Canada to extend important EU cumulation provisions, as recently achieved with South Korea and Mexico.
UK import state of play
Imports of food and drink rose by 5.1%, reaching more than £60bn. This is largely thanks to an 8.6% rise in EU markets.
Fruit remains the UK’s largest import commodity, with Spain, South Africa and Peru making up over 35% of all imports.
And while an ongoing review into the risk categorisation of fruit and veg, including within the new Border Target Operating mode, alongside tariffs reviews with Egypt, Morocco and South Africa, will encourage non-EU imports and even allow the UK to diversify supply chains, the FDF warns we must be careful to avoid ‘unnecessary barriers with out most important trading partner – the EU’.
The trade snapshot also highlighted on-going trade with Australia – these are yet to reach their full potential, but the FDF believes exports will grow this year.
Likewise, Switzerland is witnessing modest UK exports, but an updated FTA could help boost this.
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