As exports decline, what’s going wrong in the UK food trade?

The Conservative Party received another glut of bad news last week when first-quarter food & drink trade stats showed UK exports plummeted more than 20% compared with the same three-month period in 2023.

This is not only far from the post-Brexit industry revival promised by ministers, but terrible PR for the Tories. The figures published by the Food & Drink Federation represent the lowest Q1 volume shift in the past 15 years, barring an “exceptional” period in 2021 at the height of the pandemic.

Most concerningly, exports to the EU, by far our biggest market, dropped of 5.8% from £3.5bn to £3.3bn. This was driven by lesser demand across “several significant EU markets”, the FDF said, including Ireland, the UK’s most important export market, and other crucial countries like Spain (down a hefty 33.3%), the Netherlands (down 13.3%) and Belgium (down 11.3%).

It’s worth noting these are four of the top five countries Britain most relies on for its food and drink imports, so there is a clear trade discrepancy here. So, why are we buying from them, but not selling to them?

Why have UK to EU food exports dropped? 

Some of it can be explained by the current economic backdrop. British food exports are widely regarded as high-quality and therefore not normally considered cheap, with the likes of whisky, dairy, and meat seeing some of the biggest impacts across the whole of last year and this year to date.

But what ministers are not too inclined to discuss is the fact the post-Brexit trade panorama has indeed made it harder, and less profitable, for businesses to export.

The Q1 2024 numbers, jarring as they may be, are just a continuation of a decline in trade seen in recent years. Traders sending their goods to the bloc have been met with costly paperwork and checks since the EU introduced controls back in 2021, which has put off many from even doing business with the continent (the sentiment is mutual among EU importers). That, paired with lesser consumer demand due to the cost of living crisis, makes the perfect recipe for disaster.

Trade with some of the non-EU countries that the UK has focused some of its efforts on since Brexit, like Australia, Canada and India has indeed increased. But that’s not made up for the fact that exports to our biggest markets have been in decline for a fifth year in a row.

Plus, incoming ‘Not for EU’ labelling rules, which will force British exporters to have two separate labelling lines for UK and EU, would “further impact exports to our largest partners”, the FDF warned.

Read more: Why are key British food exports in such steep decline?

For those who’ve refused to acknowledge the impact of Brexit on trade in the years since the referendum, instead putting it down to Covid, the Ukraine war and the subsequent global inflation crisis, the proof is really in the pudding: imports of beef, pork and poultry all dropped due to post-Brexit red tape introduced in January this year under the government’s new Border Target Operating Model, the FDF said.

The trade group expects imports to be further affected by the second phase of the Brexit border strategy, which took effect at the end of April and introduced new checks and fees.

The government needed a win ahead of the election, but it reaped what it sowed instead. The FDF’s director of industrial growth and sustainability, Balwinder Dhoot, has called for the next government to “help unlock the full competitive trade potential of the UK’s largest manufacturing sector by delivering a trade strategy that builds business confidence and provides greater support for exporters to arrest this decline”.

What that may look like remains to be seen, as all parties prepare their manifestos in the lead-up to 4 July. The one thing that is clear in the industry is that whatever has been done so far, has not worked.