More help demanded from Hyslop...

Non-EU markets offer hope to food and drink exports

Fine food

Exports are down in the EU but up in some parts of the world

Food and drink exports fell by more than £700m (-12.7%) in the first quarter compared to the same period in 2019 but there was better news of a uplift in some non-EU countries.

Sales to the EU were hit the hardest, falling by 17.4%, largely driven by the immediate impacts of COVID-19, including the closure of pubs, restaurants and hotels, as well as large parts of the travel sector.

While sales to the majority of the UK’s top markets declined, demand has been more resilient from others nations, including Singapore, Canada and even Norway, which each saw sales growth of more than 10%.

Aside from this, the figures from the Food and Drink Federation offer a stark warning of worse to come when the next data is published.

The bad news:

– Declines were reported among the UK’s top ten products, with whisky, chocolate, cheese, salmon and gin seeing export value drops of over £20m

– The value of branded food and non-alcoholic drinks exports fell 9.1%.

– Sales to all EU nations among the UK’s top ten branded goods export markets decreased.

The good news:

– Encouragingly for Brexit supporters, almost a third of branded exports are now going to non-EU countries, a 4.5 percentage points increase on Q1 2019. The US, Australia and China all maintained demand for UK branded food and drink.

– Branded exports to Australia increased by 3.5%

– Increased sales of beer and soft drinks helped drive growth to the US by 6.9%

– Exports of gin, infant food and bottled water saw the value of exports to China rise to £34m.

Dominic Goudie, head of international trade at the FDF said: “Manufacturers and the other hidden heroes working across the supply chain have ensured continued access to essential food and drink for UK shoppers during this crisis.

“But we can now see how COVID-19 has impacted valuable overseas sales of UK food and drink that were worth over £23 billion in 2019.

“The closure of the hospitality sector in high-value export markets in the EU and further afield has been devastating for many exporters. However, we can also see that opportunities do remain in retail channels in many markets.

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“Ensuring a quick return to growth will be essential to support resilience in our industry and also the UK’s economic recovery. We are working closely with Government and industry partners to set out a recovery plan that will deliver a return to sustainable export growth right across the UK.”

The industry will now be focused on the current quarter which is expected to be significantly down as it will include almost complete shutdown of the hospitality sector from April through to the end of June.

Support needed for larger firms

UPDATE 28 May: Finance Secretary Kate Forbes said she was in talks with the Treasury to help firms that occupy multiple premises with a rateable value above £51,000.

Her comments follow a warning from UKHospitality that additional business support from the Scottish Government does not go far enough and will result in business failures and lost jobs.

Economy Secretary Fiona Hyslop yesterday announced further support for Scottish businesses including extending the small business retail, hospitality & leisure grant to businesses that occupy multiple premises with a cumulative value below £51,000.

But no grant support has yet been extended to those businesses occupying premises with a rateable value above this figure.

UKHospitality executive director for Scotland, Willie Macleod said: “This is a disappointing move by the Scottish Government that will see too many businesses in dire need of support continue to be excluded from the grant scheme.

Fiona Hyslop speaking

Fiona Hyslop: announced new grants (pic: Terry Murden)

“There is still no grant support for those businesses occupying premises with a rateable value above £51k. These businesses have been hit just as hard as any other. They are not being shielded from the effects of COVID-19 simply because their premises are more more highly rated. 

“These businesses have had no revenue since lockdown began on 23 March, are incurring significant costs while closed, an average of £60,000 per month, and are at severe risk of going out of business altogether with the potential loss of thousands of jobs.

“We hope that these businesses will be able to help spearhead the economic recovery of Scotland once the crisis has passed. They will not be able to if they have gone out of business before they have a chance to reopen.

“Grant support must be extended to these businesses, otherwise we are going to see even more failures and more people unemployed.”

This article has been amended as a result of an error in the FDF announcement

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