Food and drink export 'action plan' to boost economy

Demand around the world for British brands will help boost food and drink exports by £2.9bn, Andrea Leadsom has claimed as she launched an export action plan this week.

The popularity of UK brands had not diminished since the Brexit vote, the Defra secretary of state said as she set out her vision for a stronger food and drink industry.

British jams, beer and cider, Northern Irish whiskey and Welsh beef are all part of a push to expand exports to markets such as Japan, China, India, Australia and New Zealand.

“The world loves Great British food. We have got higher standards of animal welfare, food standards and traceability and people love our food,” she said. “As I go around stalls today, I’m hearing that British products are cool and that is the ultimate accolade.”

Government and industry will work on the International Action Plan for Food and Drink 2016-2020, launched at the Sial trade fair in Paris, to run nine campaigns covering the 18 countries with the best potential for export growth. Ironically Germany is identified as the biggest opportunity at £610m, followed by the US/Canada at £579m.

An extra £185m in exports to Japan is being targeted through demand for classic British products such as tea, jam and biscuits and new opportunities for British beef, which is currently restricted by an import ban; an additional £293m in exports to Australia and New Zealand, where it is claimed there is a growing thirst for our beer and cider; and an extra £405m in China by building access for pork and other proteins.

The action plan was developed by Defra and the Department for International Trade and will be supported by Defra’s Great British Food Unit and the government’s export credit agency UK Export Finance, which would ensure “no viable UK export fails for lack of finance or insurance”.

“The plan is incredibly ambitious and we have worked very closely with industry to make sure it is realistic and not just a wish list,” Leadsom told The Grocer. “It is based on evidence of existing relationships and existing potential leads.”

Leadsom pledged to help exporters sell more overseas and provide business support, mentoring and training to give new companies the confidence and skills to start exporting. Branded food export sales were up more than 6% to £2.4bn in the first six months of 2016, she added.

However, with sterling falling 18% against the dollar and 16% against the euro following the Brexit vote, grocery SMEs at Sial were reeling from the blow of higher production costs - with some telling of increases of up to 25% since.

The plunging pound was a “major concern” for New English Teas, which sources and packs its products in China, Sri Lanka and India. MD Nick Houghton said the company had suffered a 20% rise in input costs over the past three months. “We’re having to completely rethink our pricing strategy,” he said.

Houghton hoped the government would commit to staying in the single market to limit further impacts from Brexit.

Premium popcorn brand Joe & Seph’s was also feeling the effects, said co-founder Adam Sopher, after seeing the price of cocoa climb by 5% and sugar by 20%. “If your sales were declining or simply steady, you’d be feeling the effects very fast,” he warned.

Even The Premium British Sausage Co, which sources its meat from the UK, has been hit by a 25% increase in costs. MD Ian Cundell said big manufacturers had turned away from their usual European suppliers to instead snap up cheaper British meat.

Filippo Berio MD Walter Zanré complained costs were up “8% and rising” and predicted they could reach 20% if the pound fell to reach parity with the euro.