UK’s Food and Drink Federation expresses concern as chocolate exports decrease

Significant concerns have been expressed by the UK’s Food and Drink Federation over a marked drop in exports for Q3 of 2023, including chocolate, which dropped 15.8% owing to Brexit, post Covid-19 trading complications and the ongoing war in Ukraine, reports Neill Barston.

The organisation, which represented a dynamic range of Britain’s leading sector companies, including many within the confectionery trade, also warned that government plans to insist on ‘Not for the EU’ labelling would end up a major financial burden for many SME businesses operating within the region.

According to its latest trade snapshot, the food and drink sector, which stands as the UK’s largest manufacturing segment, had a total export value of £6.2 billion, falling 5.5.% when compared year on year. While growth was recorded in some categories, there were equally notable losses in food ranges including confectionery, breakfast cereals, as well as beef (the latter falling in export by 20%).

As the FDF noted, Ireland remains the UK’s highest export market, rising by 6.9% to £3 billion. But in the same period there has been a fall in growth for most of our major trading partners like France, the United States and the Netherlands.This trend could be compounded by the UK’s government proposals to make it mandatory to have ‘Not for EU’ on labels for products sold on the GB market and the damaging impact this will have on exports to the EU.

Confectionery Production has previously tracked the issue of exports for the sector, and from speaking to a number of independent businesses, many have indicated that Brexit has added significantly to cost of attempting to export to continental Europe, to the point that it is no longer viable to do so, unless companies have the luxury of mainland European trading basis to avoid costly and complex border checks – which the majority are not in the position to benefit from.

SMEs who represent 97% of the UK’s food and drink manufacturers, will be the hardest hit on labelling costs. Firms that want to invest and expand their businesses through exporting, will incur significant additional costs to introduce a separate production line for food that will be sold in the EU including Ireland. For those already exporting the additional costs this change imposes will make it too expensive for some to justify selling abroad and they will stop exporting.

Notably, while exports have suffered, imports from European markets have grown by 3.6%, with fruit remaining the largest category, despite  a 7% decrease in volume driven by decreasing imports of apples (-16.8%), oranges (-18.2%) and melons (-18.6%).

Balwinder Dhoot, Director of Industrial Growth and Sustainability commented: “The planned introduction of “Not for EU” labelling will create a new barrier to trading with our largest export markets in Europe and poses a significant risk to exports. We urge the government to work with industry to come up with a solution that does not impede our export capabilities.

“Imports play an important role in our food supply and we saw a rise over this period. There is room to improve processes further through improving duty suspensions, no more delays to the border target operating model, as well as the continuation of the government’s FTA programme.”

Despite the FDF expressing concerns over trade with Europe, its latest report also offered optimism for  trade with the Gulf Cooperation Council, showing that reducing tariffs with Saudi Arabia could boost future export growth, with Thailand also seen as having strong market potential.