British exports of food and drink to the EU market have fallen by 47 per cent in the first quarter of 2021, compared with the same period in the previous year, the Food and Drink Federation (FDF) has revealed.
The industry body said the exports have been impacted by the Covid-19 pandemic and changes in the UK’s trading relationship with the EU. The UK left Europe’s customs union and single market on 31 December 2020, when the transition period designed to smooth the Brexit came to an end.
Sales to non-EU nations accounted for 55 per cent of all UK food and drink exports, with exports to the EU having fallen by £2bn compared with the first quarter of 2019.
“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,” Dominic Goudie, head of international trade at the FDF, said.
“We set out a plan to mitigate these impacts by boosting support for exporters, and this was backed by the Trade and Agriculture Commission. The government must stop prevaricating and get behind these proposals to help exporters that have been shut out of trading with the EU.”
Exports to nearly all EU member states have declined significantly. Sales to Ireland were down by more than two thirds, while sales to Germany, Spain and Italy declined by more than half.
All of the UK’s top 10 products exported to the EU have also fallen significantly in value from 2019 to 2021, with whisky dropping 32.3 per cent, chocolate 36.9 per cent and lamb and mutton 14.3 per cent. Dairy products have been most severely impacted. Compared to 2020, exports of milk and cream to the EU have fallen by more than 90 per cent, and exports of cheese by two thirds in the same time period.
The UK imports from the EU were also down 10 per cent, driven by a number of factors including the continued closure of the UK’s hospitality sector, stockpiling in late 2020, reduced demand for ingredients as a result of the decline in exports to the EU, and import substitution.
“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,” commented John Whitehead of the Food & Drink Exporters Association (FDEA).
“Experienced FDEA members 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. We fully support the FDF in pressing government to boost support for exporters.”