The UK food and drink industry is poised to benefit significantly from the newly formed free trade agreements with Australia and New Zealand, set to be activated on May 31, according to the Food and Drink Federation (FDF). While UK exports to these countries saw a decline of 13% and 11.5%, respectively, mainly due to a dip in alcoholic beverage sales in Q1 2023 compared to the same period in the previous year, this setback is viewed as temporary, and the removal of tariffs is expected to pave the way for future growth.
Dominic Goudie, the head of international trade at FDF, stated that the removal of tariffs through these new free trade agreements would unlock exciting opportunities for UK food and drink manufacturers. While the government has announced the appointment of additional specialist trade attachés to assist businesses in utilizing new export opportunities, Goudie suggests that the authorities can do more to maximize growth opportunities, including dropping costly plans for UK-wide “not for EU” product labeling and offering a dedicated trade portal to improve access to essential information.
Exploring new available markets requires businesses to research and evaluate each country in relation to their product category and brand aspirations. UK Food and Drink Exporters Association Director, Nicola Thomas, highlights some of the key facts and figures businesses should consider in the May/June edition of Food Management Today. While lower tariffs are welcome, companies must create a robust market entry and development plan to succeed.
Previous examples, such as the enhanced UK-Japan trade agreement, illustrate the potential benefits of free trade agreements. This agreement, which became effective in January 2021, saw the sector’s exports rise by 58% in Q1 2023 compared to the same period in 2021, as British food and drink meet rising Japanese demand.
Despite rising prices, the overall picture for the UK food and drink industry is one of resilience and dynamism, with total UK exports reaching £5.9 billion, a 10% growth in Q1 2023 compared to the previous year, mainly due to double-digit growth within the European Union. Nonetheless, many top products experienced a decline in export volumes, with the same visible in imports.