Eight months on from Brexit and some of the longer-term effects are starting to be seen in the UK. We have seen shortages of some items on supermarket shelves, fast food chains temporarily closing due to lack of chicken or changing menus as items are not available.
The issues have been put down to a shortage of labour as EU workers returned home due to Brexit and of course Covid. HGV drivers are particularly in short supply, pushing up wages and creating a rush for new drivers to take their tests as quickly as possible. Other jobs are less attractive and there is a lack of candidates from the UK, causing significant issues for farmers, for example, with reports of crops spoiling in the fields.
Marks & Spencer’s is warning that Northern Ireland faces “a substantial reduction in food supply” and price increases later this year due to the new post-Brexit rules on movement of goods. Lorries now travel to port with 700 pages of documents, yet still only 80% of goods are allowed through to Northern Ireland and even less to France.
On a more positive note, the EU delayed the introduction of new Export Health Certificates for products of animal origin until 15th January 2022, giving exporters some breathing space to get used to the new documents which must be signed by a vet.
Clearly, it is still a challenging time for exporters. Many are still pushing ahead with their international expansion plans, however. This is borne out by the number of clients seeking support from Go Exporting with our Post Brexit Review Service. Demand is increasing for help to find the best new operating model as client’s see the effects of Brexit first-hand.
We have also seen an increase in clients looking to explore new export opportunities in countries they had not previously considered, such as the USA, Asia, Australia and South America. There is a world of opportunities out there. It is important to choose the right ones through understanding of the market, devising the best route to market strategy and finding the right distributors/partners. All key areas of support offered by Go Exporting.
The summer is nearly over, it’s time to turn your thoughts back to business and developing your international presence.
Exports of food and drink from the UK into the EU are in freefall.
That’s according to new figures released this month by the Food and Drink Federation, showing that exports to the EU have fallen by over 27% in H1 2021 compared to the same period two years ago. Overall, lost revenue totals around £2 billion.
Exports to Spain, Italy and Germany have fallen by almost half.
However, some export categories are still seeing growth. Whisky, soft drinks and salmon exports have all increased. And whilst the drop in export activity into the EU has been stark, the total loss of export revenue has been buffered by an increase in non-EU sales of 13%. The share of UK exports moving outside the EU has now risen from 40% to 47% as a result.
Dominic Goudie, head of international trade at the FDF, commented that: “The return to growth in exports to non-EU markets is welcome news, but it doesn’t make up for the disastrous loss of £2bn in sales to the EU.
“At the same time, we are seeing labour shortages across the UK’s farm-to-fork food and drink supply chain, resulting in empty spaces on UK shop shelves, disruptions to deliveries and decreased production. Unless steps are taken to address these issues, the ability of businesses to fulfil vital export orders will be impacted.”
John Whitehead of the Food and Drink Exporters Association said that there are a number of factors at play, including challenges in the supply chain and the inability to meet customers in person due to the pandemic.
“There is growing evidence that the complexity of trading with the EU has led to businesses moving operations into Europe and of importers looking for alternative suppliers, contributing to the ongoing decline in both UK exports and UK jobs.”