The Food and Drink Federation (FDF) has today published analysis showing that in third quarter of 2020, food and drink exports fell by 11.6% to £5.5bn when compared to the same period in 2019, as both exports to EU and non-EU markets declined. This decrease was largely driven by the impacts of COVID-19, including the closure of hospitality and travel sectors, which has meant a loss of sales into restaurants, cafés, bars and the out-of-home sector across Europe.
In the first nine months to September 2020, food and drink exports fell to £15.2bn (-12.9%) when compared to the same period in 2019. Exports to the majority of the top 20 markets decreased, with sales to Spain falling significantly by -33.8%. However, exports to Norway experienced the most substantial increase, rising by 38.4% to £198.8m. When looking at UK export products, pork and breakfast cereals were the only products within the top 10 to show growth, up 12.7%, and 2.5%, respectively.
Ireland remains our number one market
As the UK approaches the end of the transition period, the EU remains a key commercial partner, with over 60% of food and drink exports heading to EU markets. Within the top five products exported to the EU, whisky sales suffered the most, experiencing a reduction of 19% to £901.4m from January to September.
Ireland was the top EU destination for food and drink exports, making up almost 30% of overall sales in the EU, reflecting the close integration of UK and Irish food and drink supply chains. Ireland has been a key export market for the UK, particularly over the past 10 years, totalling around 18% of total sales during that time period. Most of the top 10 products exported to Ireland fell in value terms, with cheese and savoury snacks the only categories to show growth.
Maintaining these highly integrated supply chains across Great Britain, the Republic of Ireland and Northern Ireland as we leave the EU will be essential for future growth in our industry.
Dominic Goudie, head of international trade, FDF, said: “The continued decline in exports in the third quarter of 2020 shows the immense dilemma that UK food and drink exporters are currently facing. With less than one month to go, businesses are still in the dark about what arrangements will be in place following the end of the transition period in January 2021.
“As the UK makes it way towards economic recovery, ensuring a quick return to growth will be essential to strengthen resilience in our industry. It is vital that we continue to work closely with Government and industry partners to ensure that food and drink exporters have the support they need. Today’s news of the launch of Open Borders Direct® is a most welcome development and promises to deliver urgently needed support for UK SMEs, helping them to safely navigate key crunch points when trading overseas.”
Graham Hutcheon, managing director, group operations, Edrington and chair of the Food and Drink Sector Council Exports Working Group, said: “Our industry has experienced a substantial drop in exports in 2020 largely due to the impacts of COVID-19 on the global hospitality sector, after a decade or more of continuous growth. With the end of the transition period now just days away, food and drink businesses are facing another massive export challenge.
“More specialist support is urgently needed to ensure our industry comes through these challenges and can fully take advantage of opportunities arising from new UK trade deals. The Food and Drink Sector Council helps to ensure a collaborative approach between Government and industry and in 2021 it will set out a shared action plan to drive a return to export growth.”