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.”
Read more: Post-Brexit trade imbalance as exports from Ireland to GB soar
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.”
The huge shortage of HGV drivers in the UK is pushing up pay as hauliers start introducing retention charges on bills.
Tensions are said to be rising within the industry with the low numbers of available, trained drivers playing ‘musical chairs’ – something hauliers are looking to head off by adding ‘driver retention surcharges’ of around £65 per load to customer bills to directly boost employee pay.
One provider, speaking to Loadstar, said that the extra charges were on top of a 20% pay increase to his drivers. Smaller firms are warning that they’re being priced out of the market, whilst others have forewarned that the busy Christmas period could see huge disruption.
“Despite this increase, every haulier we deal with told us that from September there would be surcharges of between £50-65 per load,” the forwarder said.
“I cannot bear to think what December and peak season build-up will be like for container haulage when it is already this bad. Our hauliers told us this was a purely non-profit move, the money going directly to drivers to stop them taking more lucrative offers from larger firms.”
The government has this month urged UL firms to train and hire British drivers to fill what’s estimated to be 100,000 vacancies in the sector, driven by a combination of EU workers returning back to mainland Europe following Brexit, and a lengthy delay in driver training brought on by the pandemic.
Read more: Post-Brexit trade imbalance as exports from Ireland to GB soar
They are also considering bringing forward a review of its Shortage of Occupation list to tackle the issue by assessing which jobs the UK will be more lenient in allowing overseas workers to apply for visas for.
Morrison’s CEO David Potts noted to the BBC that: “Maybe look at a list of people who come into the country to work, maybe add the drivers to that list for a while, see how we get on with that, because we need to break the back of the issue in order to keep what is a great supply chain working in Britain.”
Exports from Ireland into Great Britain have soared in the first half of 2021 whilst GB exports across the Irish Sea have fallen.
According to the Irish Central Statistics Office, exports to Great Britain (excluding NI) have risen 20% in the first six months of the year, rising by over €1 billion to €6.7bn.
This means activity from Ireland into GB has overtaken activity flowing in the other direction, with GB exports falling by 32% to €5.3 billion.
Food, live animals and manufactured goods have been hardest hit.
Why has the balance shifted?
In a word – Brexit.
The UK’s departure from the European Union and the single market has hit British exporters harder than their Irish counterparts due to border checks on shipments to the EU. However, for Irish and EU exporters into Britain, a more phased approach of checks has been implemented with the UK government opting for a 12-month transition period.
Read more: UK signs new trade agreements, closes in on NZ deal
As a result, all food and plant exports into the EU from UK firms have been subject to sanitary and phytosanitary checks since the start of the year, whereas Irish businesses have not been subject to the same levels of red tape.
If your business is still working to adapt to the post-Brexit trading environment, we can help. See our free Brexit Knowledge Bank and expert downloads and resources here.
The UN’s Intergovernmental Panel on Climate Change’s landmark report published this week painted a bleak picture for the future of humanity and the planet.
There was, however, some cause for optimism. We can halt the ever-warming climate, or at least limit it to below two degrees, but we’ll all have to play our part.
The report was wide in scope, but it did hone in on some specific areas that are obviously apparent to exporting businesses – those areas being global shipping and aviation.
And it’s not just how we can look to neutralise the carbon output associated with a consumer-led truly global planet. It’s also to do with the effect that increasingly worsening weather will have on supply chains.
Supply chains are already being impacted by extreme weather – weather that is becoming more frequent due to the warming planet.
Marine risk consultant, captain Andrew Kinsey noted to AGCS that: ”Weather is no longer seasonal. Year-round we see tornadoes, hurricanes, floods and storms affecting shipping and inland marine, as well as associated infrastructure. Almost every mode of transport is affected, with a knock-on effect for supply chains.”
Read more: UK signs new trade agreements, closes in on NZ deal
Things look a little more positive on the freight front. Shipping and HGV industries have already made moves to cut emissions whilst legislation likely to be implemented in 2023 will require older ships having to hold permits to access EU ports. There’s also movement in the UK to test e-highways where HGVs will be powered by overhead cables.
The biggest challenge though will remain the aviation industry, both for passenger travel but also freight. Electric battery technology just is not yet available to power heavy freight loaders over huge distances.
The UK has signed a new free trade agreement with Norway, Iceland and Liechtenstein, expected to boost trade in a relationship with over £2billion a year.
Signed in London earlier this month, the deal with lock-in tariff-free trade and secure greater access for UK businesses.
The deal is one of the most advanced that Norway, Iceland and Liechtenstein have ever signed with gold standard provisions in digital trade, mobile roaming and business travel. High-quality British food and farm products will also see duty-free quotas with new reductions and quotas on pork, poultry and other goods.
On the signing of the new agreement, international trade secretary Liz Truss commented that: “Today’s deal signing is a landmark moment for trade between the UK, Iceland, Norway and Liechtenstein. It will support jobs, cut red tape, and open up more opportunities for the UK.
“I urge businesses across the country, from farmers to fintech, to seize the fantastic opportunities this deal presents.”
Elsewhere, the UK is closing in on an agreement with New Zealand after months of negotiations.
Truss again noted that: “We’re closing in on an agreement in principle, with six more chapters now complete.
“The UK and New Zealand share core values, a long history and a commitment to free trade. I want a modern agreement that pushes new frontiers in areas like green and digital trade.”
Read more: Why invest in the costs of an experienced export consultant?
That deal would represent a key step towards the UK becoming a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – a £9trilion free trading zone spanning 11 Asia-Pacific nations.
When you are just starting out on your export journey, there seems no end of opportunity. All you need to do is find a few distributors and off you go. Little or no cost and limitless returns?!
Unfortunately, the reality is much harder than it seems. There are many pitfalls to avoid. Targeting the right market and finding the best partner are both critical. Make the wrong choices and it can end up costing you $000s and even threaten your whole export journey.
What can go wrong?
- You target the wrong market and spend a lot of money trying to enter when other countries offer a better opportunity
- Your products/services are not suitable for the target market
- Your business is not properly prepared to handle export orders
- You try to cover too many countries in one go and end up just scratching the surface of the market, never really making progress
- You sign up a distributor, but they do nothing to promote your products/services, resulting in low or even zero sales
- Your distributor does not have the right contacts in your market sector to best represent your products/services in the market
- Your distributor does not have the resources to allocate to promote your products/services
- Your distributor or an associated company represents competing or conflicting products
Any one of these issues, or worse a combination of them, can derail your export journey before it really starts and cost you a lot of money.
This is where an experienced export consultant comes in. We can help you make the right choices from the beginning. Making sure the basics are right, assessing the opportunities, planning your export strategy, identifying and evaluating the right partners and distributors for your business, are all critical.
The costs of using a consultant can seem high initially but view it as an investment in your future business. The results of our input will be felt for years to come. Some businesses work with the right distributor for 20-30 years! Building successful partnerships can reap high rewards over time.
You would view an investment in plant and machinery or computers as essential for your business and write off the cost over several years.
Similarly, consultancy is an intellectual asset for your business, an investment that will bring returns over and over again, long after the project is complete.
So, when assessing the price of consultancy look at the costs and returns over a 5 – 10 year period.
As an additional peace of mind, we GUARANTEE to meet agreed outputs and KPIs or your MONEY BACK
So, you have everything to gain and nothing to lose.
We look forward to working with you.
Has your business deferred Customs Declarations since the start of last year?
If so, you have 175 days from the date of import to submit the full declaration. That time is nearly up. You or your customs agent must file with HMRC within that deadline.
Do you or they have the capacity to cope with the volume of entries required? Do you need additional support?
Go Exporting is pleased to offer our Customs Agency service to take up the excess. Don’t be caught out. We can help.
Contact us today for a no-obligation discussion on your requirements and how we can ease your Customs Declarations headaches!
Last month we teamed up with the British Library to deliver a webinar on exporting and importing following Brexit.
We’ve split the two-hour session into specific chunks to help you get to the information you need.
The webinar covered a full range of topics, including:
- What’s changed with Brexit
- What the implications are
- How to address the challenges
- Rules of Origin
- Key issues facing exporters post-Brexit
- How to trade internationally post-Brexit
This final session covers how businesses can expand horizons to trade internationally and create growth in the post-Brexit era, including barriers to trade, exploring new opportunities and taking positive action.
Need more support?
We’ve put together a range of free guides and workbooks to help businesses navigate the choppy Brexit waters.
Last month we teamed up with the British Library to deliver a webinar on exporting and importing following Brexit.
We’ve split the two-hour session into specific chunks to help you get to the information you need.
The webinar covered a full range of topics, including:
- What’s changed with Brexit
- What the implications are
- How to address the challenges
- Rules of Origin
- Key issues facing exporters post-Brexit
- How to trade internationally post-Brexit
This session covers the key issues facing exporters in the wake of Brexit, including customs declarations, issues maintaining seamless deliveries into the EU, Origin and triangulation.
Need more support?
We’ve put together a range of free guides and workbooks to help businesses navigate the choppy Brexit waters.
Last month we teamed up with the British Library to deliver a webinar on exporting and importing following Brexit.
We’ve split the two-hour session into specific chunks to help you get to the information you need.
The webinar covered a full range of topics, including:
- What’s changed with Brexit
- What the implications are
- How to address the challenges
- Rules of Origin
- Key issues facing exporters post-Brexit
- How to trade internationally post-Brexit
This session covers Rules of Origin and the implications of the UK-EU TCA, including what it says, bilateral cumulation, whether or not sufficient transformation has taken place and how to prove origin.
Need more support?
We’ve put together a range of free guides and workbooks to help businesses navigate the choppy Brexit waters.
