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UK Food and Drink Exports Growth Slows to a Crawl in 2018

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UK Food and Drink Exports Growth Slows to a Crawl in 2018

UK Food and Drink Exports Growth Slows to a Crawl in 2018
March 26
09:48 2019

The Food and Drink Federation (FDF) has published analysis showing that food and drink exports have increased by only 2.5% to £22.6 billion from January–December 2018, compared to the same period in 2017, down from 9.7% growth in the previous year. This slower growth was seen in both exports to EU markets, up 4.3% in 2018 compared to up 10.3% in 2017, and non-EU markets, down 0.3% in 2018 compared to up 8.9% in 2017.

Growth of exports of branded goods also fell, down 0.1% to £5.8 billion, when compared to the previous year. The growth was up 5.0% to EU markets, but down 10.2% to non-EU markets.

Seven of the top 20 markets for UK food and drink exports saw a fall in value, including the United States and France which fell by 2.2% and 3.4% respectively. Exports of salmon and beer fell by 11.6% and 7.0% by value, while the other products among the top 10 exports grew over the period.

This fall in growth, for both overall exports and exports of branded goods, highlights the need for specialist export support to deliver ambitious long-term export targets, whether food and drink manufacturers are looking to export for the first time, enter new markets, or expand their existing markets. As part of the Government’s Industrial Strategy Activity, FDF is in formal negotiations with Government on a Food and Drink Sector Deal. This follows the submission of a proposal which included measures such as support for market research, in-market support, and an export portal.

Additionally, the lower growth is reflective of the results of FDF’s recently published Food & Drink Business Confidence Report 2018 which showed that in Q4 2018, decreased export profitability was a concern for 30% of members. Looking forward to 2019, 42% of respondents expect exports to decrease and 46% expect them to remain the same.

Wheat-based products

Wheat and wheat-based goods (such as breakfast cereals, sweet biscuits, cakes and breads) account for around 10% of overall UK food and drink exports, and are consistently found in the top 50 exported food products. The UK’s top destination for all wheat and wheat-based exports is Ireland, with 35.2% of such goods being exported to Ireland in 2018. The US and France are also significant buyers of UK-manufactured wheat-based goods, such as bread and biscuits.

All wheat-based products reported growth over the past year, except for cakes which saw an overall decline of 13%. The fastest growing product amongst the UK’s 6 key wheat-based exports was pasta, primarily due to a 46% rise in the exports from the UK to non-EU countries, such as Australia and Hong Kong.

Considering growth over the past year, non-EU markets have been a key point of interest, notably the UAE (United Arab Emirates), Hong Kong, and Australia. The three markets combined account for around 10% of UK wheat-based good exports.

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