FDBusiness.com

Five years on from the UK’s departure from the EU, a new report from the Food and Drink Federation (FDF) giving insight into the UK’s food and drink trade performance over 2024, has revealed that food export volumes to the bloc have declined by over a third (34.1%), compared to 2019 levels. The 2024 Trade Snapshot also reveals that globally, UK export volumes fell by more than a tenth (12.6%) last year, compared to 2023. This reflects a longer-term trend, with the UK’s global food and drink export volumes down a fifth (19.8%) on average between 2020 and 2024, compared to between 2015 and 2019.

While some of this decline can be linked to global trends like COVID and the war in Ukraine, the report reveals that other European countries, including the Netherlands, Germany and Italy, have seen their export volumes increase since 2020. This indicates that the downturn in food export volumes is not part of a global trend, but unique to the UK’s post-Brexit arrangements.

Meanwhile, food and drink imports from the EU to the UK grew 3.3% last year to £44.7 billion compared to 2023, as European businesses benefit from a more advantageous trading environment, even after new border checks for EU food and drink products were introduced in April 2024. Food and drink imports to the UK are subject to fewer checks compared to UK businesses exporting equivalent products to Europe, helping drive this growth. This has contributed to total food and drink imports to the UK reaching their highest ever level, worth £63.1 billion in 2024. On the other hand, many UK exporters, particularly SMEs, are struggling to meet the EU’s more stringent requirements.

With the data revealing a concerning gap between UK food and drink imports and exports, FDF is calling for a strategic approach to EU trade relations to help reverse this trend. This includes introducing a balanced SPS agreement to remove existing friction, as well as helping businesses to contend with a full range of complex trade regulations, for example by simplifying paperwork and reducing border fees.

Balwinder Dhoot, Director of Industry Growth and Sustainability, FDF said: “These latest figures show the stark reality for the UK’s 12,500 food and drink businesses who are struggling to deal with the complexity and bureaucracy that comes when trading with Europe. Government must prioritise working with the EU, and our industry, to remove as many of these barriers as possible.

“It’s important that we don’t just get a quick fix, but the right fit for the UK when it comes to our relationship with the EU. We stand ready to work with government to develop a trade deal that will drive growth in our sector.”

The Trade Snapshot highlights that the EU remains the UK’s most important food and drink trade partner, accounting for 61.8% of exports and 75.6% of imports in 2024. However, across the rest of the globe, food export volumes have increased 5.7% year-on-year as the UK sees the benefits of recent new trade agreements.

For example, two years after entry into force, further promotion of a new free trade agreement (FTA) with Australia resulted in the value of exports to the country increasing 9.1% to £429.5 million.

Additionally, while Ireland and France remain the UK’s biggest individual export markets, the USA, which took the third spot, saw particularly strong growth last year, up more than a tenth (11.8%), compared to 2023. Turkey also offers a major export market opportunity, seeing growth of almost a quarter (23.4%) in 2024.

The UK can harness the opportunity that joining the CPTPP in December 2024 presents and achieve an ambitious trade agreement with the Gulf Cooperation Council (GCC) to continue to drive growth in emerging markets and protect its food security.

Nicola Thomas, Director of UK Food and Drink Exporters Association (FDEA), said: “Against a backdrop of global geopolitical and economic uncertainty, it is encouraging to note several new countries are potentially opening up for UK food and drink exporters as FTAs come into play. Here at the FDEA, we are increasingly seeing that leveraging the knowledge, expertise and experience of industry peers, international trade specialists and in-market experts has never been more important to help navigate both the opportunities and challenges which lie ahead.”