£2bn loss in food sales related to Brexit, FDF report finds
The latest report from the Food and Drink Federation (FDF) shows a £2 billion loss in food sales has been attributed to a “drop in sales to the EU.”
Sales of UK food and drink to non-EU countries were up 13%, accounting for 46.6% (£4.3 billion) of all UK food and drink exports in the first half of 2021, driven by a return to growth in China, Singapore, Australia, Japan and the Gulf region. This increase means non-EU exports are now almost back to pre-Covid levels.
Despite the return to growth in these countries, overall sales of UK food and drink are down £2 billion compared to pre-Covid levels. FDF figures suggested this was because of a sharp drop in sales to the EU.
A combination of the ongoing impacts of the Covid-19 pandemic, and new barriers to trade resulting from the new trading arrangements, have led to a fall in exports to the EU of more than a quarter since the first half of 2019.
UK imports of food and drink were down nearly 10% in the first half of 2021 compared to pre-Covid levels, however imports from non-EU markets increased during this period. Imports from the EU were particularly badly impacted by the pandemic and the new trading relationship, falling nearly 15% since 2019, a loss of £2.4 billion.
The loss of UK exports to the EU contributed to reduced demand for EU ingredients for use in UK manufacturing, while import substitution by UK manufacturers and retailers also had an impact. According to FDF, imports from the EU are likely to deteriorate further in 2022 after the UK’s full border controls are in place. Products of animal origin were heavily impacted, with a large fall in imports of pork (-19.6%), cheese (-17.6%) and chicken (-17.9%).
Dominic Goudie, head of international trade, the FDF, said that the return to growth in exports to non-EU markets was “welcome news”, but it “doesn’t make up for the disastrous loss of £2 billion in sales to the EU.”
Goudie added: “It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support.”