Sun, 29 January 2023

Newsletter sign-up

Subscribe now
The House Live All
2022: Catalysing the UK’s journey as an innovation nation Partner content
Press releases

Post-Brexit UK Food Industry Is £2bn Worse Off After "Disastrous" Fall In EU Sales

Post-Brexit UK Food Industry Is £2bn Worse Off After 'Disastrous' Fall In EU Sales
4 min read

Exclusive: New figures show a sharp fall in food and drink sales to the European Union in the first half of this year has led to the industry being £2bn down on pre-pandemic levels, with post-Brexit trade barriers believed to be the principal cause.

According to a comprehensive analysis of trade during the first six months of 2021 by the Food & Drink Federation (FDF), shared exclusively with PoliticsHome, food and drink exports to the EU were 15.9% down on the same period last year, and down by over a quarter — 27.4% — compared to the first half of 2019. 

Labour has said the figures "blow apart" the government's "myth" that trade disruption is a temporary issues as the UK and EU adjust to the new rules. 

The UK formally left the EU on 31 January 2020, with most changes to trade arrangements coming into effect on 1 January 2021 following a transition period. 

Meat and dairy products have been the worst hit, the FDF analysis found, due largely to stringent post-Brexit rules for British businesses selling goods of animal origin to customers in the bloc.

Exports of beef to the continent were 24.1% down in the first half of 2021 compared with the same period last year, and down by 37.1% on the first six months of 2019. Cheese exports were 26.1% down on the same period last year, and over a third – 34.2% – down on the first half of 2019.

The FDF said the loss in sales was mostly affecting smaller businesses, often run by families, who are finding it more difficult than big companies to deal with post-Brexit paperwork.

The pandemic is also believed to have had some impact on UK exports, as the locking down of hospitality businesses across Europe has also reduced demand for British products. 

Sales of milk, cream, and chocolate to the EU are also significantly down since pre-Covid.

Food and drink exports to nearly all EU countries fell significantly, with those to Germany, Spain, and Italy down around 50% on the first six months of 2019. Sales to Ireland, the UK industry's largest export market, were £0.5bn down on pre-pandemic levels, the analysis found.

The trade body's analysis showed that British food and drink exports to non-EU countries like China, Japan, and Australia had grown to make up some ground lost during the pandemic.

But the industry does not believe that the pandemic alone can account for the significant shortfalls. Covid "doesn’t make up for the disastrous loss of £2bn in sales to the EU," warned the FDF's Head of International Trade, Dominic Goudie.

"It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support," he said.

John Whitehead of the Food & Drink Exporters Association said there was "growing evidence" that the red tape which now faces exporters to the EU has led some businesses to move operations to the continent and forced European customers to look elsewhere for products. 

The figures "blow apart the two myths ministers have been spinning for months," Labour's Shadow Trade Secretary Emily Thornberry told PoliticsHome.

"First, they show these are not temporary teething problems; they are the direct consequence of the holes in Boris Johnson's Brexit deal; and second, they show the growth in our food exports around the world will never come close to making up for our losses with Europe."

Thornberry said the government had its "head in the sand" and should listen to affected businesses by negotiating a veterinary agreement with with the EU, which Brussels says would eliminate checks on around 80% of agri-food goods entering from the UK, as a matter of urgency.

The Department for Environment, Food and Rural Affairs (Defra) insisted the immediate impact of the pandemic on global trade meant it was "still too early to draw any firm conclusions" about the impact of the Boris Johnson's post-Brexit trade deal.

“Overall exports to the EU have increased throughout the year, with the latest monthly trade stats for June showing another rise" a Defra spokesperson told PoliticsHome.

“We continue to help businesses get the support they need to trade effectively with Europe and also to seize new opportunities as we strike trade deals with the world's fastest growing markets.

"That’s why we are operating export helplines, running webinars with experts and offering businesses support via our network of 300 international trade advisers."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now

Partner content
Connecting Communities

Connecting Communities is an initiative aimed at empowering and strengthening community ties across the UK. Launched in partnership with The National Lottery, it aims to promote dialogue and support Parliamentarians working to nurture a more connected society.

Find out more