FDF raises concerns over steep drop in global exports, including a confectionery sales slowdown
Dover, Kent, England. Trucks queue on the A2 highway to enter the Port of Dover and a cross channel ferry to France.
The Food and Drink Federation (FDF) has expressed fears, as latest export figures show a major slowdown in food export volumes in the first quarter of this year, reducing 20% compared to last year, with chocolate sales intended for overseas markets also down 1.5% in value (standing at £211 million) in Q1 of 2024, reports Neill Barston.
According to the organisation’s analysis, the overall performance of the sector represented the lowest quarterly volume performance in the last 15 years, except for an exceptional period in Q1 2021 which saw the end of the transition period and the global pandemic.
As Confectionery Production has previously covered, with major trading factors including additional Brexit administration and logistics costs, many smaller and medium-sized enterprises within the confectionery and snacks segment have either significantly reduced, or ceased their export activities to mainland Europe over the heightened costs of the past few years due to to additional resource burdens that have rendered such trade non viable.
There have also been widespread concerns over proposed policies on labelling that would bring in additional regulatory costs should ‘Not for sale in the EU’ tags be required for a host of food categories. However, with the UK now in a general election period, whether any new government administration under a different political party other than the present Conservative administration could strike an alternative deal on methods of controlling trade post Brexit, remains to be seen.
Consequently, the total export value of food and drink for Q1 stood at £5.7bn, falling 5.3 per cent when compared with the same period the previous year. Ireland remains the UK’s largest export market, despite a fall of 3.5 per cent to £1bn.
As the FDF noted, the findings suggest that rising costs and the global economic slowdown have been impacting trade substantially. To help address this decline, improved support for exporters is needed, particularly for SMEs, which are more vulnerable to the challenges posed by new costs and processes. In addition, industry requires a supportive business environment that allows firms to compete overseas and doesn’t saddle companies with costly and unnecessary regulatory burdens.
Conversely, the organisation added that food import volumes increased by over 7 per cent on the year and import values increased by 0.4 per cent to £14.8bn. The report highlights the impact of the introduction of the Export Health Certificate for medium-risk EU goods in January of this year under the Border Target Operating Model (BTOM). This has led to increased costs and bureaucracy for traders, reflected in the decline of beef and poultry imports. The second phase of the BTOM, which took effect at the end of April, introduced new checks and fees, adding to the challenges faced by the industry.
Balwinder Dhoot, Director of Industrial Growth and Sustainability said: “Trade in food and drink plays a critical role in the UK’s food supply resilience and the industry contributes billions to the UK economy. Our analysis is concerning, with food export volumes seeing a significant decline by over a fifth on the year.
“The next government must 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.”
The report also focuses on opportunities to enhance existing trading arrangements with Turkey, South Africa and Morocco and potential new opportunities in the Gulf Region, the UK’s second largest non-EU market for food and drink exports.
Trade with Turkey now ranks in the top twenty destinations for food and drink exports, increasing by 0.8 per cent to reach a record high of £60m. Imports from Turkey also rose by 15.2 per cent to reach £197.5m with fruits (£54.7m) and fish (£30.4m) the highest value imports. Exports to the Gulf Cooperation Council (GCC) increased by 4.3 per cent to nearly £196m, with cheese (£12.0m) and soft drinks (£5.8m) showing strong growth.