UK food and drink exports to the European Union dropped by 75% in January, the first month of life outside the EU’s single market, according to data published by the UK’s Food and Drink Federation.
Exports to the bloc fell from £1 billion in January 2020 to £256.4 million in the same month the following year, and collapsed by more than 80% to Ireland, Germany and Italy, figures released on Monday (22 March) show.
Salmon and beef exports were particularly badly hit, slumping by 98% and 91% respectively, while whisky exports dropped from £105.4 million to £38.9 million, a 63% fall.
Overall, the fishing sector recorded a 79% slump in exports from £25.2 million to £5.3 million, a reflection of industry complaints about delays caused by new paperwork requirements which has left it losing an estimated £1 million per day.
The FDF said that “the impacts of COVID and stockpiling by UK businesses in the EU ahead of the end of the transition period were contributing factors but much of this is likely due to the non-tariff barriers faced by UK exporters and the collapse of groupage movements which has shut out many SME exporters.”
The closure of much of the EU’s restaurant and catering industry due to lockdown measures taken to control the spread of COVID-19 are likely to continue to weigh on exports.
UK food and drink exports to the rest of the world also fell by 11%, figures which are likely to reflect disruption to trade and consumption caused by the pandemic.
Imports from the EU were also down 25% from £2.6 billion to £1.9 billion.
The government has sought to play down the effects of the new Trade and Cooperation Agreement, which came into force on 1 January.
Earlier this month, the Office for National Statistics (ONS) published statistics showed that UK exports to the EU fell by 40.7% in January compared to December.
However, the UK’s minister for EU relations, David Frost, who negotiated the trade deal, contended that overall freight volumes between the UK and the EU have returned to normal levels since early February.
Frost added that the “unique combination of factors made it inevitable that we would see some unusual figures this January.”
However, the gradual phase out of grace periods after which customs checks on food products and other goods will become mandatory are likely to continue to hurt businesses on both sides of the Channel.
The EU imposed customs checks on UK exports on 1 January, while the UK has delayed introducing reciprocal measures until October. The status of grace periods on goods travelling from Great Britain to Northern Ireland are also at the heart of an ongoing legal row between the two sides.
The FDF warned that the “phased implementation of border checks is likely to mean that the full impacts of the end of the transition on imports from the EU will not be seen until 2022.”
[Edited by Josie Le Blond]