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Greater export support needed to compete with european rivals
The Food and Drink Federation (FDF) is calling on Government to provide greater support for UK food and drink manufacturers to compete with European rivals following the announcement of strong export growth figures in the first half of 2018.
The call to action follows the recent publication of the Government’s Export Strategy, and the publication of FDF analysis comparing UK food and drink sales to China, the US, and Japan, with exports to those countries by other European nations.
From 2015-2017, growth of the UK’s food and drink exports to Japan (+10.4%) lagged behind nations including Ireland (+153.3%), Spain (+31.3%), Germany (+28.3%) and Denmark (+13.7%).
In comparison, UK sales to China, where certain sectors benefit from in-market specialist support, have grown by 94.7%, experiencing far greater growth than Spain (+42.5%), Ireland (+40.2%), Denmark (24.5%), and Germany (+12.3%).
FDF has submitted a detailed sector deal proposal for the food and drink industry which includes plans to boost specialist export support, including increased access to market research, in-market specialists, and the development of an online food and drink export portal.
The proposals were submitted in response to the publication of the Government’s Industrial Strategy white paper last year and include targeting five priority growth markets identified by food and drink exporters in research conducted last year; China, the USA, India, Japan, and the UAE.
Fastest export growth seen in Singapore and Australia
Singapore and Australia were the fastest growing markets for UK food and drink exports, within the top 20 markets, with growth of 22.5% and 19.3% respectively. The top five UK products sold to Singapore were whisky, wine, gin, chocolate and sweet biscuits. For Australia, exports of gin were up 115% and soft drinks were up 99%, while outside of the top 10 products, pasta sales rose 257%.
Significantly, food and drink exports to China, Australia, and Singapore all grew in excess of 40% between H1 2016 and H1 2018 (46.5%, 48.7%, and 42.1% respectively). Of these, China and Australia are on the list of UK Government priority exports markets as set out in Defra’s International Action Plan, with campaign activities running between 2016 and 2020.
Strong exports growth continues
These half year figures reveal that exports of all food and drink grew by 5.1% to £10.68bn. As in Q1 2018, total exports to EU markets grew faster than those to non-EU markets, up 7.3% compared to 1.6%. The top five export markets made up over half (52%) of overall food and drink exports, with exports to Ireland alone making up 18.4%.
The fastest growing UK products by value within the top 10 were breakfast cereals, gin and beef. Exports of branded goods over the six months rose by 4.6% to £2.8bn. Over the past 10 years, from H1 2008 to H1 2018, total food and drink exports have grown by 75%, with an average annual growth rate of 5.2%. Over the same period, exports to non-EU countries grew faster (109.3%) than to EU countries (59.3%).
Ian Wright CBE, Chief Executive, Food and Drink Federation, said: “This analysis of UK food and drink exports in the first half of this year reveals several great success stories and a number of areas with room for growth. Food and drink sales are flying the flag for the UK around the world. However, some of our competitors are outshining us. It’s clear that focusing export support on specific product sectors can transform performance. With great uncertainty still hanging over our future trading relationship with our largest food and drink market – the EU – now is the time for the Government to back UK food & drink exports with the kind of turbo-charged support that FDF has proposed.”
Elsa Fairbanks, Director, Food & Drink Exports Association (FDEA), added: “We are greatly encouraged by such a positive performance for food and drink exports both in the EU27 and wider global markets. The figures confirm the need for Government to ensure that the success of our exporters is not damaged by a failure to maintain the current ease of trade with our key markets in Europe after the end of March 2019.
“The recent performance is testament to our industry’s commitment to maintain and grow business in core EU markets whilst at the same time, investing resources to build longer term opportunities worldwide. We should not underestimate the risks that are being faced. We fully endorse the FDF’s proposal for a Sector Deal for the industry and look forward to a positive decision on this.”