Brexit cuts UK food and drink exports to EU by almost half

UK exports of food and drink to the EU dropped by almost half in the first three months of 2021 from a year earlier in what trade groups said was a measure of the impact of post-Brexit trade barriers.

Produce to the value of £1.7 billion (€1.98bn) was exported to European countries in the first quarter of the year, down 46.6 per cent from 2020, according to the Food and Drink Federation, an industry body.

The decline from 2019, when exports were unaffected by the pandemic, was even greater – a drop of 55.1 per cent or £2 billion.

Dominic Goudie, head of international trade at the federation, said: "The loss of £2 billion 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."

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Companies are struggling with the costs, paperwork and delays resulting from new customs and veterinary checks, while smaller businesses have suffered from recent barriers to sending multiple shipments in a single load.

John Whitehead, director at the Food and Drink Exporters Association, said: "Whilst some of this large drop can be put down to end-of-year stockpiling, significant business has been lost as a direct result of the additional bureaucracy, customs delays and costs of trading with the EU."

Exports to non-EU countries rose slightly – by 0.3 per cent to £2 billion, exceeding exports to Europe – but that was not enough to prevent a 28.1 per cent decline in overall food and drinks exports to £3.7 billion.

Products from whisky to chocolate, lamb, cereals and sauces were affected. Whisky sales to the EU fell 11.6 per cent to £256.5 million, while chocolate sales declined more than a fifth to £99.3 million, and lamb and mutton sales dropped 16.8 per cent to £74.8 million.

Dairy products were worst hit, with milk and cream exports to Europe dropping 90 per cent. Disruptions from Covid-19 continued to affect sales, along with Brexit factors, the industry group said.

Sales to Ireland, previously the UK's biggest food and drinks export market, fell by more than two-thirds to £281 million.

Regulations

Mr Whitehead said members of his group “are continuing to battle against inconsistent interpretations of regulations across the EU, and having to weigh up whether the time and cost involved is sustainable”.

Mr Goudie called on the government to implement plans previously set out by his group, including a food and drink export council to aid UK-wide collaboration, and more specialist support for exporters.

The government said overall exports to the EU in March and April exceeded 2020 levels, while it was offering export helplines, webinars, support from trade advisers and a £20 million Brexit support fund for small and medium-sized businesses.

“The impact of the Covid pandemic across Europe has affected trade and depressed demand, and it is too early to draw any firm conclusions on the long-term impacts of our new trading relationship with the EU,” they said.

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

Imports of food and drink dropped 10 per cent in the first quarter, driven by a decline of more than 15 per cent in imports from the EU, partly because of continued closures of UK hospitality venues as the result of Covid-19, the Food and Drink Federation said. – Copyright The Financial Times Limited 2021