British exports to non-EU countries 'beyond expectations': FDF

By Niamh Michail

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags International trade

British food and drink exports were up 6.2% in the first half of 2016 thanks to a weak pound while exports to non-EU countries grew “beyond expectations” in the pre-Brexit period, says the Food and Drink Federation (FDF).

British exports of branded food and non-alcoholic drinks rose by 6.2% in the first half of 2016 compared to the same period last year - “excellent news​” for the trade group’s  director general Ian Wright.

UK exports were made more competitive in the first half of the year thanks to a weaker pound at the start of 2016, and with the price of the pound falling even further since the Brexit vote, further increases in exports can be expected before the end of the year, said the trade group.   

Wright added: “It's very pleasing to see non-EU exports performing beyond expectations, with UK firms taking advantage of increased competitiveness.”

fdf 2

Exports to non-EU countries rose by £93.7m (€109.8m), a 14% increase on H1 figures, meaning they now account for 31.4% of all branded exports. 

Malaysia was the top export destination for value growth, with an impressive +268.5% increase worth £46.9m (€54.9m), followed by China up 100.9% (worth £24.1 or €28.2m) and the US in third place with a 31.6% increase.

Despite the impressive growth rates, these export destinations are starting from a relatively small base and EU countries are still the UK’s top export destination, vastly out numbering non-EU markets in terms of volume sales.

Of the UK’s 12 biggest export markets, only two – the US and China - were located outside the common market.

Ireland is Britain's most important foreign market, importing more than double the amount of France which is in second place.

Similarly, Ireland exports 41% of its food and drink production to the UK, worth €4.4bn. Following the pre-Brexit referendum result on 24 June, the Irish food board Bord Bia outlined a series of actions to alleviate industry fears and cushion the blow, such as organising trade missions to North Africa and Asia to develop these markets.

Which categories were the top performers?

According to data from HM Custom and Excise, Britain's top performing sector was ‘other groceries’, which covers an array of foods such as fats and oils, sauces, ice cream and preserved fruit and vegetables, lead the way in terms of value sales worth £1914.8 (€2,242.3m), followed by cereals and bakery worth £1266.7m (€1,483.5),  

Export, import, trade, commerce, logistics, Copyright bugphai
© iStock / Bugphai

Meanwhile the confectionery sector saw a 6.7% rise - with chocolate the top export product overall -  while the dairy sector was up 1.6%.  

Director at the Food and Drink Exporters Association (FDEA), Elsa Fairbanks, said the UK’s improved export performance reflected the commitment that many food and drink companies were making to grow the international side of their business.

“A significant number of our members are reporting that their export customers are now proving to be a vital part of a thriving business,” ​she said.

Wright said FDF was now eagerly awaiting the launch of Department of Food, Environment and Rural Affairs' (DEFRA) export plan in order to see “how government intends on supporting our industry overseas in a time of prospective economic uncertainty.”

FDF has set a target of growing the UK’s food and drink manufacturing industry by 20% by 2020, starting form 2010 figures.

Last week Europe’s food industry association, FoodDrinkEurope (FDE) published its economic bulletin​ showing that Europe's trade surplus for food and drink products reached €5.8 billion in the first quarter of 2016. Exports were worth €22,801 million in Q1 2015 and this rose 2.2% to hit €23,303m in 2016.

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