In the first three months of this year, the UK food and drink sector has taken a £2 billion hit in lost exports to the EU, described by the industry as a ‘disaster’, according to new figures published on Friday (18 June).
Exports of the UK’s food and drink to non-EU markets were higher than sales to the EU in the first quarter of 2021, with EU sales falling 47% compared with the same period last year, as a result of the ongoing impact of COVID-19 and post–Brexit trade relations.
Data published by UK’s Food and Drink Federation, an industry lobby group, revealed that exports to the EU have fallen by £2bn compared with the first quarter of 2019, when the UK was still part of the EU and the single market.
Sales to Ireland were down by more than two thirds over the first three months of this year, while sales to Germany, Spain and Italy declined by more than half since March 2020.
Although London’s Trade and Cooperation Agreement with the EU, which came into force in January after the UK left the single market, allows tariff and quota free trade in goods, it has resulted in the imposition of customs checks.
UK imports from the EU were also down 10%, with vegetables, wine and fruit lower by between 14% and 20%.
“The loss of £2 billion of exports to the EU is a disaster for our industry, and is a very clear indication of the scale of losses that UK manufacturers face in the longer-term due to new trade barriers with the EU,” said Dominic Goudie, head of international trade at the FDF.
Both the food and drink and other sectors have reported that EU–UK trade has been driven down by the effects of COVID, which has effectively shut down much of the hospitality industry, stockpiling in late 2020, and adapting to the new customs checks.
The FDF warned that it expects the fall in EU–UK trade to “increase when full checks are implemented at UK borders in 2022”, pointing to the fact that UK checks on EU imports will be gradually phased in over the remainder of this year.
“Whilst some of this large drop can be put down to end of year stockpiling, significant business has been lost as a direct result of the additional bureaucracy, customs delays and costs of trading with the EU,” said John Whitehead of the Food & Drink Exporters Association.
Earlier this week, the UK requested EU agreement to extend a grace period for post-Brexit rules on chilled meat imports to Northern Ireland – part of the so-called ‘sausage war’ between London and Brussels. Exports from Britain to the island of Ireland are now subject to customs checks under the terms of the Northern Ireland protocol.
The European Commission said on Thursday that it had received the request to delay customs checks until October.
[Edited by Zoran Radosavljevic]