British food exports have fallen for the first time in 11 years but the weakness in the pound could help companies recover, according to the Food and Drinks Federation.
The industry body published its annual figures on Wednesday showing a 4 per cent fall in food and non-alcoholic drinks exports to £12.3bn in 2015, driven by a 6 per cent drop to the EU, the main trading partner.
This was the first fall since 2004 and comes after a government began a food export drive with the launch of a “Great British Food Unit” in January.
Elizabeth Truss, minister for the environment, food and rural affairs, set a target of increasing manufactured, or value added, food exports by one-third to £6bn by 2020.
Manufactured food and drinks exports held up better than the overall trend last year, rising by 0.9 per cent to £4.6bn, compared with 2014.
Angela Coleshill, director of competitiveness at FDF, said: “While total exports of food and non-alcoholic flatlined in 2012, this is the first drop we have seen since 2004. In many cases, export volumes were up in 2015; however, the overall value fell as a result of the strength of the pound.”
Ms Coleshill said that to reach the £6bn target “we will need to see an average of 5.5 per cent growth each year, and while this year’s figure of 0.9 per cent is down on the longer-term trend, it is a promising start given challenging circumstances. There is huge untapped potential within our industry and we anticipate stronger export growth in 2016”.
Exports to Germany fell 10 per cent and to Ireland, France, the Netherlands and Belgium 7 per cent. The EU accounts for more than 70 per cent of UK food and non-alcoholic drinks exports.
Outside the EU, sales of tea, pork and processed milk helped push exports to China up by 9 per cent to £238m, making the country a top 10 export market for the first time.
The United Arab Emirates also rose in importance with a 10 per cent increase, driven by breakfast cereals, such as Quaker Oats, but exports to the US dropped 3 per cent to £549m, due to a fall in salmon exports.
Chocolate, salmon and cheese top food export categories, though vegetables — prepared as well as fresh — were the fastest-growing category last year, up 6 per cent to £336.3m.
The UK food and drinks industry is dominated by small companies that find it hard to compete against large multinationals.
The FDF hopes the government will give more support to entrepreneurs, open new export markets and encourage investment in the industry.
It has also called on the government to treble the number of industry apprenticeships and increase threefold protected name products such as Cornish pasties and Newcastle Brown Ale.
“For our industry to meet this stretching target [of £6bn of exports], we need to make sure small and medium-sized food companies, in particular, are helped to compete in the fiercely competitive global marketplace,” said Ms Coleshill.
