Santander UK and the Food & Drink Federation (FDF) have released a new industry report that shows UK food and drink exports fell by 9.7% during 2020 amid the disruption in the hospitality and travel sectors both domestically and overseas throughout the last year.
However, an easing of pandemic restrictions coupled with businesses stockpiling products in the EU before the end of the transition period meant UK exports fell by only 1.7% in the final quarter of 2020.
Exports to both EU and non-EU markets fell by 8.0%, and 12.1% respectively. Most of the top 10 products exported by the UK also fell due to the pandemic. This includes a decline in volume of the UK’s top three products: whisky (-13.7%), chocolate (-2.3%) and cheese (-7.5%).
Despite this, pork sales to EU and non-EU markets increased in volume by 6.2% in 2020, with a total value of £629.7m. Sales of breakfast cereals also increased in volume by 12.6% with the top market being the Republic of Ireland.
As the UK forges its new identity as an independent trading nation following the end of the Brexit transition period, the report highlights that significant growth opportunities remain for UK food and drink exporters, both in the EU and further afield.
Significant growth markets detailed in the study include the US, Canada, Australia and New Zealand. The UK’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the third-largest free-trade bloc in the world by GDP, is also expected to present new opportunities for food and drink exporters if it is approved.
The FDF and Santander UK stated that they welcome recent initiatives from the Government to help UK exporters, including the creation of four Trade and Investment Hubs by the Department of International Trade (DIT).
However, they stressed that more can be done to ensure UK food and drink exporters have all the support they need. FDF and Santander UK said the Government should adopt the export proposals produced and agreed by industry members of the Food and Drink Sector Council that were also backed in the recent report published by the Trade and Agriculture Commission. These include establishing a Food and Drink Export Council to drive UK-wide collaboration, and addressing the gap in specialist support for exporters of food and drink that exists in England.
Ian Wright CBE, Chief Executive, Food and Drink Federation, commented: “The FDF continues to work in close partnership with the Government and other industry bodies to ensure our sector has the support that is needed to fulfil our untapped export potential. These initiatives are vital to help create new jobs and drive the quick return to growth that is essential to strengthen resilience across our industry.
“As the UK’s largest manufacturing sector, food and drink makes a unique economic and cultural contribution in every region of the UK. Now we look forward to the Government demonstrating its commitment to working in partnership with us to accelerate growth in our sector.”
Andrew Williams, Head of Food & Drink Sector, Santander Corporate & Commercial Banking, added: “While the food and drink industry didn’t escape the effects of the pandemic and Brexit last year, it certainly didn’t let them beat it. There is much scope for growth in 2021 and we are proud to support food and drink businesses throughout the UK in making the most of opportunities to expand at home and to export overseas, both to the EU and beyond.”
