Latest figures show £2bn fall in the first quarter of 2021
The first three months of 2021 paint a bleak picture for British food and exports to the European Union (EU). The fall of £2 billion represents a drop of up to 90% in sales to the Eurozone and has been described as a disaster by industry insiders.
Dominic Goudie, the head of international trade for the British Food and Drink Federation has called for the UK Government to “stop prevaricating over proposals to help exporters shut out of trading with the EU.”
He added that – “The loss of £2bn of exports to the EU is a disaster for our industry, and is a very clear indication of the scale of losses that UK manufacturers face in the longer term due to new trade barriers with the EU.”
The cause for the drop has been described as deeper than just Brexit checks and Covid. The sector has said that the figures show that much of the problems are structural, rather than just teething problems caused by the UK’s departure from the EU. Many UK exporters have expressed doubt over the long-term viability of their businesses unless government action is forthcoming.
The figures, released by the HMRC, show the dairy sector as being the worst affected, with exports down by 90%. Other sectors that were hit badly include whisky (32%), chocolate (37%), fish (52%), and soft drinks (76%).
A year-on-year analysis by country shows the scale of the drop:
• Ireland: -71%
• Portugal: -72%
• Spain: -63%
• Germany: -55%
Imports from the EU were also severely affected, although not as badly. Ireland was one of the worst-hit. Pre-Brexit, the country exported much of its produce to the UK, but imports have dropped substantially in the past year with cheese, chicken, and beef imports all affected.
Other imports that showed substantial drops were wine (20%), vegetables (14%), and fruit (16%).
This decline in EU exports now means that, for the first time in decades, UK exports to the rest of the world account for more than 50% of overall trade. The worldwide situation has “stabilized” faster than with the EU, and this paired with the easing of covid restrictions has helped fuel strong growths in markets such as China, the US, South Korea, Hong Kong, and Japan.
In China alone, exports were up by 25%, showing strong increases with products such as pork, whisky, vegetable oils, and drinks. The Food and Drink Federation’s report also noted that trade deals in the pipeline with other countries such as Australia would help ensure that some of the lost EU trade could be offset with increased trade to the rest of the world.
Another glimmer of light is in the whisky sector’s exports to the US. Retaliatory trade tariffs that have badly hit the sector are being dropped after the US and UK reached agreements to suspend them.