UK Exports Continue to Rise in Q3 Report

Driven by an uptick in sales to countries outside the EU, the UK’s Food and Drink Federation (FDF) reported for the third quarter of 2019 an 8.3 percent increase year over year to £6.2 billion for the country’s food and drink exports. This continuing positive performance for 2019 brought the year to date total to nearly £17.5 billion.

A  13.1 percent change year over year reflects strong growth outside the EU – namely with China, the UK’s seventh-largest trading partner, whose value increase in 2019 was the largest seen in over two decades; while the export value growth to non-EU countries was more than double that of exports to EU member states.

Gavin Darby Comments on the Largest Manufacturing Sector in the UK

As the voice of the industry, the FDF reports that food and drink accounted for 6.4 percent of the country’s total exports this year, and the highest value exported products are on the rise: whisky – once again the UK’s most significant export– salmon, wine, gin, beef and pork saw a more than 10 percent increase year over year.

 FDF President Gavin Darby said of the results: “This is the fourth consecutive year of food and drink export growth in Q3. While the overall value of UK exports across all industries has declined year-to-date, food and drink has shown great resilience to buck that trend, delivering growth of 6.3% on 2018 already.”

“At the same time,” Darby continued, “there remains significant untapped growth potential for UK food and drink exports.” Ongoing uncertainty around the terms of the future UK-EU trading relationship serves to account for a few of the more disappointing figures in the FDF report. Sales of branded goods to the EU declined 3.2 percent in Q3, reinforcing the view  of some that key buyers are starting to look elsewhere while the UK continues to navigate trade policy amid uncertain terms of Brexit.

Trade Policy in Flux: FDF and UK Government

If food and drink in the UK is expected to build on recent successes, Gavin Darby insists that “the next Government must ensure we have a future trade policy for food and drink which recognises our industry’s unique ability to deliver jobs and growth in every UK community. They should also co-invest in the FDF’s proposals for a genuinely business-led approach to specialist exports support,” said Darby in reference to an FDF Manifesto published in November 2019. Darby looks to the alignment between the food and drink industry and the UK Government in working on the best possible UK-EU trade and regulatory relationship.

The quarterly Business Confidence Survey distributed amongst British food and drink manufacturers echoed this sentiment – as reported in Q2, all of the top five risks for 2019 were Brexit-related, including the possibility of no-deal, exchange rate volatility, cost of ingredients, UK import tariff uncertainty and ongoing political uncertainty. However, the survey also showed industry recognition of FDF’s contributions in delivering guidance and preparedness initiatives to accompany pending change.

Record Growth: UK Beef & Spirits Skyrocket in Asia

Notably, food and drink exports to China continue to rise, seeing significant increase year over year to the tune of £64.6 million, driven by branded products, meat exports (up over 131 percent in the first nine months of the year), fish and seafood and spirits (up 35.5 percent). The UK credits strong performance in the Chinese market to high standards in production and quality for the country’s beef export. China has significant access to UK beef after a UK-China agreement was secured in October 2019.

2019 saw £7.6 million of the country’s beef exported to China, while the Department for Environment, Food and Rural Affairs (Defra) forecasts this number could grow to upwards of £230 million over the next five years. The sector also posted growth exceeding 20 percent up from 2018 for Japan, Taiwan and India. Japan continues to increase whisky and salmon imports from the UK, with an increase of 33.3 percent over the year to date.

Learn more about Gavin Darby:

https://www.crunchbase.com/person/gavin-darby

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