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UK food and drink producers lose £2bn as EU exports tumble

British food and drinks firms lost more than £2billion in sales after seeing a ‘disastrous’ fall in exports to the EU in the first half of the year, due to Brexit red-tape and pandemic disruption.

While exports to non-EU countries have soared, including to China, Singapore and Australia, they were not enough to offset a sharp decline in sales to the EU, with cheese and beef exports the worst hit.

The Food and Drink Federation, which represents more than 800 food and drink companies, from global brands to small businesses, said this was down to ‘the ongoing impact of the Covid-19 pandemic’ and ‘the new trading relationship with the EU’.  

Exports of cheese were down 34% in the first half of the year compared to 2019

Exports of beef and cheese were the worst hit, with sales down 37 and 34 per cent respectively in the first half of the year compared to the same six months in 2019, before the pandemic.

However, sales of salmon to the EU have risen by 13 per cent compared to 2019 and by 27 per cent compared to last year.

Sales of whisky, another top product exported to the EU, remain down 12 per cent compared to two years ago, but were up 20 per cent on last year. 

‘The return to growth in exports to non-EU markets is welcome news, but it doesn’t make up for the disastrous loss of £2billion in sales to the EU,’ said the head of international trade at the FDF, Dominic Goudie.

‘It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support.’

One in five small exporters have stopped selling into the EU because of Brexit red tape and costs involved, according to recent figures by the Federation of Small Businesses. 

A further one in five are thinking about ending sales to the EU.

Goudie said that the mounting shortage of lorry drivers and other workers in the food and drink supply chain was exacerbating the situation.

‘At the same time, we are seeing labour shortages across the UK’s farm-to-fork food and drink supply chain, resulting in empty spaces on UK shop shelves, disruptions to deliveries and decreased production,’ he added. 

‘Unless steps are taken to address these issues, the ability of businesses to fulfil vital export orders will be impacted.’

Exports of beef and cheese to the EU were the worst hit, but salmon and whisky sales rose

Exports of beef and cheese to the EU were the worst hit, but salmon and whisky sales rose

Decline: The FDF said food and drinks exports to the EU were £4.9billion in the first half, down from £5.8bn last year and £6.7bn in 2019

Decline: The FDF said food and drinks exports to the EU were £4.9billion in the first half, down from £5.8bn last year and £6.7bn in 2019

Food exporters have been particularly hit by Brexit because of sanitary and phytosanitary (SPS) checks that were not necessary before we left the union.

Overall, exporters of all kinds have struggled with extra paperwork and administrative costs since 1 January this year, when new requirements were introduced.

It comes as a recent investigation by The Mail on Sunday found that the cost of shipping a pallet of cheese to the EU has more than tripled from £75 to £240 due to extra red tape for exporters and price hikes by couriers.

Shipping a pallet of cheese to the EU has more than tripled from £75 to £240 

Jason Hinds, sales director of Neal’s Yard Dairy, told the MoS that pallets of its artisan cheeses had gone off after lorries were rejected at the French border and sent back to Britain due to admin issues with other exports being carried on the same truck. 

The FDF said food and drinks exports to the EU fell 16 per cent to £4.9billion in the first half compared to last year. 

All food and drinks exports fell 4.5 per cent to £9.2billion since last year. They are down more than £2billion since 2009, when they were worth £11.1billion

Producers lost some £500million in sales to Ireland, while exports to Germany, Spain and Italy were all down by around 50 per cent since the first half of 2019.  

UK imports from the EU have also started to decline, and could ‘deteriorate’ further next year, especially those of meat, when full SPS checks on imports are introduced for the first time at UK ports. 

Producers lost some £500million in sales to Ireland, while exports to Germany, Spain and Italy were all down by around 50 per cent since the first half of 2019.

Producers lost some £500million in sales to Ireland, while exports to Germany, Spain and Italy were all down by around 50 per cent since the first half of 2019.

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