FDF reveals 20% quarterly drop in British exports market amid mounting trade tests

Latest analysis from the Food and Drink Federation has shown that businesses across its combined sectors have struggled to gain traction in overseas markets, with exports down 20.4% in the first quarter of the year, compared against pre-pandemic levels in 2020, writes Neill Barston.

With the UK Chancellor Rachel Reeves confirming that the UK’s economy contracted 0.3% this quarter – which is the worst for 18 months, market conditions have been impacted by several key factors including tariffs, geopolitical conditions on a global level, and lingering Brexit-related trading challenges.

The FDF’s latest Trade Snapshot did point to some potential bright spots, in terms of trade deals that may be on the horizon, with an agreement signed with India in the past month, as well as a further one with the US – the outcome of which remains far less certain, given that terms that were supposedly agreed over tariffs demanded by the American administration seemingly unravelling within the space of several weeks.

As the FDF’s snapshot shows, businesses in many instances have struggle to recoup the losses felt during the Covid-19 pandemic, though the value of food and drink exports to non-EU countries were up 10.5% in Q1, as food producers take advantage of improved access to growing global markets.

The British trade organisation noted thatsince the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into force in December 2024, UK exports of sweets to Malaysia rose by 48%, while soft drinks to the South East Asian region have more than doubled (103%).

Export volumes of food and non-alcoholic drinks to the EU – the UK’s biggest and most important trade partner – were down by 3.7% and 1.7%, respectively compared Q1 2024, and Confectionery Production has spoken to a number of companies over the past two years that have either drastically reduced exports to the Continent, or entirely given up on once profitable trade routes due to considerable hikes in logistics costs directly because of Brexti, as well as additional administration that has proved costly and confusing to many.

However, according to the FDF, the recently announced negotiations on a UK/EU Sanitary and Phytosanitary (SPS) agreement with the EU is expected to have a positive impact, and could boost UK-EU exports by almost a quarter (22.5%)1. However, this won’t affect exports until 2027 at the earliest.

The report also highlights the potential value of recent negotiations with the US and India for UK trade. Exports to India have surged over the past decade, up 156%. With the new Free Trade Agreement expected to boost exports even further, soft drinks, biscuits and chocolate present particular opportunities for UK manufacturers.

While there are encouraging signs of an improved global trade outlook ahead, FDF warns that there’s more work to be done. It’s vital that government continues to build closer trade relationships with trade partners, near and far, and prioritises British competitiveness in ongoing negotiations.

Balwinder Dhoot, Director of Industry Growth and Sustainability, FDF said: “As the UK’s biggest and most important trade partner, the negotiations on a Sanitary and Phytosanitary (SPS) agreement with the EU is a positive step towards reversing a concerning decline in exports from the UK. But it’s far from a silver bullet. It’s vital that through these negotiations the UK secures the ability to influence EU regulatory decisions that will impact British businesses.

“This new data demonstrates that there are also plenty of opportunities for UK food and drink beyond the EU, meaning government should keep its foot on the gas when it comes to improving the UK’s trade relationships across other global markets. Removing trade barriers and helping more businesses expand into new markets abroad presents a crucial growth opportunity, while diversifying our import markets is vital to protecting the UK’s food security.”

Furthermore, as the FDF noted, its report highlights several opportunities for government to maintain momentum by removing barriers to trade across the globe. For example, the United Arab Emirates (UAE), entered the UK’s top ten export markets for the first time last quarter while UK imports from Turkey were up 8.4% in Q1 2025. Pushing tariff reductions over the line faster, will help promote further growth within these emerging markets.

Additionally, while recent improvements to the overall trading relationship with the US were welcome, UK food and drink exports to the US increased by almost a quarter (23%) at the start of 2025 – a significant rise as businesses brace for the impact of increased tariffs. The removal of 10% export tariffs that continue to apply to our sector, and a reduction on import tariffs for products that are not produced in the UK, should remain priorities for ongoing negotiations.