UK – Brexit is coming back to bite the UK food industry with many hurdles presented by the new boundaries between the UK and European Union causing a 75.5% year-on-year drop in food and beverage exports.
This is according to the latest figures released by the Food and Drink Federation (FDF) which also revealed a significant drop in exports to international markets in the wake of the UK’s decision to leave the EU.
Apart from exports to EU falling, the reports which compared data from January 2021 to January 2020 showed that year-on-year food and drink exports to non-EU countries also fell 11.1%.
According to the figures, the value of all UK food and drink exports stood at £1.7 billion in Jan 2020, and this figure fell 51.1% to £824.9 million as of January 2021.
The FDF claims that this is due largely to the new non-tariff barriers faced by UK exporters post-Brexit, as well as the ‘collapse of groupage movements, which has shut out many SME exporters’.
“Businesses face significant challenges when trading with the EU and small businesses, in particular, have been shut out because groupage distribution is not working,” said Dominic Goudie, head of international trade at FDF.
The FDF also highlighted that the impact of Covid-19 and stockpiling by UK businesses prior to the end of the transition period with the EU were also contributing factors.
Exports to all EU member states fell, with exports to Ireland, Germany, Italy, Portugal, Austria, Romania, Estonia, Slovenia, Croatia and Luxembourg all declining more than 80%.
Ireland previously stood as the UK’s largest food and drink market in the EU, representing around 18% of exports at a value of £299.5 million (about US$410 million) in January 2020.
However, as of January 2021, this value dropped to £45.3 million (about US$61 million); approximately 5% of all food and drink exports to the EU.
All ten of the UK’s largest food and drink product categories exported to the EU declined, with salmon exports plunging 98% and beef by 91.5% compared to the same period in January 2020.
Whisky still stands as the UK’s largest food and drink export to the EU, but the value of exports slumped 63.1% from £105.4 million (about US$144.5 million) to £38.9 million (about US$52.13 million).
Meanwhile, cheese exports plummeted 85.1% from £45.5 million (about US$62.42 million) to £6.8 million (about US$9.33 million) year-on-year, while chocolate exports fell from £41.4 million (about US$56.79 million) to £13.1 million (about US$17.97 million).
Dominic Goudie, head of international trade at FDF, said: “It is extremely worrying that our exports to the EU have fallen by more than 75% in January.”
Goudie further noted that in the absence of solutions, EU exporters will face much the same difficulties when the UK’s full border operating model enters into force in 2022.
In response to the gridlocks at the border, British officials announced in March that a number of foods and beverages from the European Union will be exempted from border checks to enable the sector to recover from the COVID-19 pandemic.
Commenting on the development, Ian Wright, chief executive of the UK Food and Drink Federation had then said, “Government must now use this time to do everything it can to support UK food and drink exporters who continue to face huge difficulties moving goods into the EU.”
He further noted that British authorities “must work constructively with the EU to address barriers to trade by improving the implementation of the trade agreement and streamlining processes.”
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