UK’s food and drink exports to the EU have declined by almost a quarter nine months after the Tories’ Brexit deal came into force, creating sales losses worth £2.4 billion, new figures show.
Sales to big EU markets experienced a sharp drop, with exports to Spain declining by over half on 2019 levels and those to Germany and Italy by 44.5 per cent and 43.3 per cent, according to the Food and Drink Federation.
And sales to the Republic of Ireland, the UK’s biggest international market, also dropped by over a quarter.
Industry leaders warned the situation may be “here to stay”, which would prevent prime minister Boris Johnson’s ambitions to level up the country, according to The Independent.
Smallest UK exporters ‘hardest hit’
Meanwhile, data revealed UK’s food and drink exports to non-EU countries increased by 11 per cent in the first three quarters of this year.
Overall, exports were down £2.7 billion in the first three quarters of 2021, compared to the same period in 2019, with the EU’s decline making up most of the decline – £2.4 billion.
FDF head of international trade Dominic Goudie told The Independent: “It is extremely disappointing to see how badly our trade with the EU has been affected, with our smallest exporters hardest hit.
“It is essential that the government works constructively with the EU to improve the implementation of the Trade and Cooperation Agreement to ensure that it works for small businesses, otherwise this downturn will be here to stay.
He added: “Food and drink, from farm-to-fork, is uniquely placed to deliver on the government’s levelling-up agenda, delivering jobs and growth in every part of the UK.
“However, our supply chains continue to struggle, particularly through a lack of available workers. Businesses want to help the government realise its ‘global Britain’ ambitions, but they need the government to clear the obstacles and help them take advantage of new opportunities.”
Exports to non-EU countries like China and UAE ‘not enough’
According to FDF figures, increases in exports to countries like China and the UAE only account for a small proportion of UK exports of what Britain would have traded with the EU before Brexit.
But the situation may be worsened when new import controls on food and drink will come into effect next year – measures which have been delayed so far to give the UK time to prepare.
In autumn, it emerged that an additional £600 million in costs hit British importers since January.
The cause has been identified as Brexit, because the taxes were not required for EU imports when Britain was in the single market.
The rules reportedly show that free trade deals are not cost-free to UK businesses. Thousands of businesses have discovered they have to pay taxes if the products they import are not sufficiently manufactured in the EU.
Related: Brexit trade minister begs US to ‘awaken to Brexit opportunity’
