The first quarter of 2017 saw exports of all UK food and drink grow to £4.9bn, up 8.3% on 2016. This represents the largest first quarter exports value on record. The UK’s top 3 export products remain whisky, salmon and chocolate. Export growth to non-EU countries (+9.4%) increased at a faster rate than those to the EU (+7.4%).
Ireland, France and the United States are the top three destinations for UK food and drink in terms of overall value. Positive growth was reported in all top 20 markets, apart from Spain which saw a 21.6% decrease compared with 2016.
The three export markets that saw the greatest percentage growth in value in Q1 were South Korea (+40.3%), Belgium (+37.3%), and South Africa (+31.2%). Beer was the key driver in export growth to South Korea, while wheat and barley were behind the rise in Belgian exports, and animal feed boosted those to South Africa.
Exports of salmon saw the largest value growth, up 52.3% in Q1, with wine experiencing the largest increase in terms of export volume, up 13.8%.
While the fall in the price of the pound had helped to boost UK export competitiveness, this currency weakness has also led to an increase in the cost of many essential imported ingredients and raw materials. This has resulted in the UK’s food and drink trade deficit increasing by 19% to -£6.2bn in Q1 2017. The impact of weaker sterling on British exports is expected to be seen in Q3 2017 as companies negotiate new sales agreements with overseas buyers.
Ahead of the General Election on June 8 FDF has called upon the next Government to recognise strategic importance of UK food and drink and the huge untapped export potential among UK manufacturers. At present only 20% of food and drink manufacturers actively export and FDF wants to work in partnership with Government to scale-up its provision of specialist export support in food and drink.
Ian Wright CBE, Director General, FDF, said:
“The growth of food and alcoholic drink exports we’ve seen in Q1 is very encouraging news for our industry. We want to work with Government to take advantage of increased demand for UK products overseas and the opportunities that leaving the EU is expected to create. We would encourage the new Government to look to Bord Bia (the Irish Food Board) as inspiration in creating an organisation to help turbocharge sales of UK food and drink globally.
“It is also very pleasing to see non-EU exports performing beyond expectations. As the UK leaves the EU growth in exports is hugely important to our sector. We hope that with the determination of businesses and the assistance of the new Government, we can open more channels and provide a further boost to the UK’s competitiveness on the world market.”
Elsa Fairbanks, Director, FDEA, said:
“FDEA welcomes these good food and drink export figures. We would like to see Government further encourage exporting by ensuring producers have the skills and support to enter new, challenging markets post-Brexit.
We must not ignore the importance of existing and very strong EU markets which still represent 65% of food and drink exports and this must be a priority as Brexit negotiations start. Ease of access to EU markets will continue to be vital to our industry in future as many food and drink products are not suited to export to distant markets. Although we recognise the need to explore new opportunities, leaving the EU should not mean ignoring those we already have”.