Exports of U.K. food and drink totaled GBP 4.9 billion (USD 6.3 billion, EUR 5.6 billion) in the first-quarter of this year, an increase of 8.3 percent year-on-year, and represented the largest Q1 exports value on record, according to new figures published by the Food & Drink Federation (FDF) trade association.
The United Kingdom’s top three export products remain whisky, salmon and chocolate, with exports of salmon seeing the largest value growth, up 52.3 percent in Q1 2017 to GBP 186.7 million (USD 240 million, EUR 214.9 million). Only whisky exports achieved a higher value with GBP 895.9 million (USD 1.2 billion, EUR 1 billion), up 9.9 percent.
Salmon exports also achieved a 13 percent growth in volume, eclipsed only by wine, which increased by 13.8 percent.
Overall, U.K. fish and seafood exports achieved a total value of GBP 439.9 million (USD 565.2 million, EUR 503.4 million) in Q1 2017, up 29.6 percent, making it the country’s fourth most valuable export sector. Alcoholic drinks led the way with a total export value of almost GBP 1.5 billion (USD 1.9 billion, EUR 1.7 billion).
FDF finds that export growth to non-EU countries (9.4 percent) increased at a faster rate than those to the EU (7.4 percent). Ireland, France and the United States were the top three destinations for U.K. food and drink in terms of overall value. Positive growth was reported in all top 20 markets, apart from Spain which imported 21.6 percent less (in value terms) compared with 2016.
The three export markets that saw the largest percentage growth in value in Q1 were South Korea (40.3 percent), Belgium (37.3 percent), and South Africa (31.2 percent). Beer was the key driver in export growth to South Korea, while wheat and barley were behind the rise in Belgian exports, and animal feed boosted those to South Africa.
While the fall in the price of the pound had helped to boost U.K. export competitiveness, this currency weakness has also led to an increase in the cost of many essential imported ingredients and raw materials. Consequently, the country's food and drink trade deficit increased by 19 percent to -GBP 6.2 billion (-USD 8 billion, -EUR 7.1 billion) in Q1 2017.
The impact of weaker sterling on British exports is expected to be seen in Q3 2017 as companies negotiate new sales agreements with overseas buyers, said FDF.
Ahead of the country’s General Election on 8 June, FDF has called upon the next government to recognise strategic importance of U.K. food and drink and the huge untapped export potential among U.K. manufacturers. At present only 20 percent of food and drink manufacturers actively export products.
The growth of food and alcoholic drink exports seen in the last quarter was “very encouraging news” for the industry, said Ian Wright, director general of the FDF.
“It is also very pleasing to see non-EU exports performing beyond expectations. As the U.K. leaves the EU, growth in exports is hugely important to our sector. We hope that with the determination of businesses and the assistance of the new government, we can open more channels and provide a further boost to the U.K.'s competitiveness on the world market,” he said.
