Santander UK and FDF report: disappointing year for food and drink exports exposes need for greater long-term support

Santander UK and the Food and Drink Federation (FDF) today launch an industry report showing that despite sporadic re-openings of the hospitality and travel sectors both domestically and overseas throughout the last year, UK food and drink exports in 2020 fell by 9.7% compared to 2019.

However, a widespread easing of pandemic restrictions coupled with businesses stockpiling products in the EU before the end of the transition period meant our exports fell by just 1.7% in Q4 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 transition period, significant growth opportunities remain for UK food and drink exporters, both in the EU and further afield.

Significant growth markets detailed in the report 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, will also present new opportunities for food and drink exporters if it is approved.

The FDF and Santander UK 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). The FDF is proud to be a supporting partner on the Government’s Open Doors campaign, helping UK farmers export to the world’s fastest growing markets.

However, more can be done to ensure UK food and drink exporters have all the support they need. 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 critical gap in specialist support for exporters of food and drink that exists in England.

Ian Wright, chief executive, Food and Drink Federation, said: “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, said: “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.”