What's Happening?
The UK Food and Drink Federation (FDF) has reported a significant decline in food and drink exports from the UK to the EU, with a drop of 23.4% over the past five years compared to the period before Brexit. This decline is particularly notable in key
EU markets such as Germany, Poland, and Belgium, where exports have decreased by 59.1%, 51.9%, and 39.9% respectively. Despite these challenges, global food and drink exports have seen a 5.8% increase, driven by a 6.2% rise in non-EU exports. The FDF highlights the importance of easing trade barriers and growing exports, especially for small and medium enterprises (SMEs). A new Sanitary and Phytosanitary (SPS) agreement with the EU is anticipated to reduce trade costs and complexity, although the FDF warns that additional support and clear transition periods are necessary for businesses to adapt.
Why It's Important?
The decline in UK food and drink exports to the EU underscores the ongoing challenges faced by UK businesses in the post-Brexit trade environment. This situation affects the competitiveness and resilience of the UK food and drink manufacturing sector, which is already grappling with rising production costs and regulatory pressures. The potential SPS agreement with the EU could alleviate some trade barriers, but the FDF emphasizes that it is not a comprehensive solution. The broader impact includes potential changes in supply chain dynamics and the need for UK businesses to explore new markets outside the EU. The government's role in supporting export growth and ensuring the effectiveness of new trade agreements is crucial for the sector's future.
What's Next?
The UK government and the FDF are expected to continue negotiations on the SPS agreement to facilitate smoother trade with the EU. The FDF is advocating for a ten-year export growth plan, supported by government funding, to help businesses expand into new markets. This includes prioritizing the SPS deal while maintaining progress in building global customer bases. The FDF also calls for complementary policies on packaging, labeling, and customs procedures to support the sector. As new trade agreements with regions like the Gulf Cooperation Council and South Korea are anticipated, the focus will be on providing targeted support for SMEs to capitalize on these opportunities.
