Supply chain · 27 February 2018

Access to EU trade deals vital to food and drink export growth post-Brexit

Craft beers
UK craft beer exports grew by nearly ?100m in 2017

The Food and Drink Federation has highlighted that preferential trade deals are the key to export success post-Brexit as the EU27, and the countries with which it has trade agreements, make up the lion-share of Britain?s food and drink export market.

Failure to maintain access to the European Union?s preferential trade deals could have serious implications for the food and drink industry. Currently, exports to these markets are valued in excess of ?2bn to UK producers, so this comes as a stark warning for the industry.

The warning comes from the Food and Drink Federation (FDF), which reports that the EU has more than 30 agreements in place with around 60 countries, who contributed ?2.3bn of the UK?s total food and drink export figure of over ?22bn last year. Of these countries, the biggest customers include Canada, South Korea, South Africa, Mexico and Norway.

The EU, combined with those markets with which it has trade deals, account for over 70 per cent of the UK?s food and drink export value ? over ?15bn.

As the UK prepares to leave the EU, it is crunch time for the food industry ? continued access to each of the EU?s trade deals is crucial for future growth. According to the FDF, to achieve this, the government will need to secure an agreement with each third country, and in each case with the EU, that includes a fair share of tariff-rate quotas.
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Ian Wright CBE, Director General, FDF, said: ?Brexit presents an opportunity to sell more of our fantastic food overseas, but in order to do that we must ensure that we have appropriate access to our largest trading partners in place once we?ve left the EU.?

Elsa Fairbanks, Director, Food & Drink Exports Association (FDEA), said: ?We are delighted that global sales of food and drink from the UK continue to grow in line with the FDF?s industry ambition to increase exports of branded food and non-alcoholic drink by a third to ?6bn 2020.

?This reflects the quality of the products that are being produced in the UK and also the hard work and commitment of the food and drink exporting community.? With only one in five companies currently exporting, the FDEA looks forward to working with more businesses to help them start their export journey.?

The FDF also reports that key non-EU countries are showing promise; the US and China were the largest of these markets for total food and drink exports, with growth of 5.2 per cent and 29 per cent in 2017 respectively.

The US was the largest non-EU market for UK exports of branded goods, worth ?201.8m in 2017. Significant categories included soft drinks and alcohol.

Swapping a three-course meal for a packet of crisps

Trade agreements have yet to be drawn up for the UK after Brexit, and this week the idea of a ?soft Brexit? with Britain remaining in the customs union has been making the headlines. However, were the UK to remain in a customs union, it would be unable to negotiate its own agreements outside the EU.

Speaking on BBC Radio 4?s Today programme earlier this week, former secretary for the Department of International Trade, Sir Martin Donnelly, warned that leaving the single market and customs union was like ?giving up a three-course meal? for the ?promise of a packet of crisps in the future?.

In other words, there is a risk that once the UK leaves these trade agreements, the ones it negotiates for itself might not measure up.

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Letitia Booty is a special projects journalist for Business Advice. She has a BA in English Literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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