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No-deal planning dented food businesses in 2019

More than a quarter of UK food and drink businesses spent at least £1 million on stockpiling last year for a threatened no-deal Brexit which never took place.

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No-deal planning dented food businesses in 2019

The latest Food and Drink Federation business confidence survey revealed no-deal scares cost most food businesses at least £100,000 in 2019.

 

Food industry confidence rose rose slightly in the last quarter of the year, but net confidence still stood at -22.4 per cent, an improvement from -51.3 per cent at the start of the year.

 

When it came to what worried food processors at the end of 2019, 61 per cent highlighted increased costs due to more responsible packaging demands, while 69 per cent saw their raw material costs rise. Some 40 per cent also reported seeing a fall in margins.

 

Looking ahead, they said key concerns were around the cost of ingredients, inconsistent policies on plastic reduction, and post-Brexit border and customs issues. 


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UK is EU’s largest food market 

 

On Brexit day the UK became the EU’s largest food market by far, something which could influence negotiations over a a trade agreement between the two territories.

 

Last year, the 27 other countries of the EU shipped a record €39.2 billion (£34.4 billion) of food to the UK. In comparison, sales to the US, previously the EU’s largest food market, were nearly 40 per cent less at just €24.1bn (£20.2bn), with exports to China at €14.7bn (£12.2bn).

 

Total food imports into the UK were at an all-time high of £48.4 billion, with 71 per cent of that total from the EU.

 

The total figure was 1.1 per cent higher than in 2018 and 11.4 per cent more than in 2016, the year of the Brexit vote.

 

UK exports to the EU were also at a record level of £24.1bn, up 3.7 per cent on the year and 15.5 per cent higher than in 2016, with a weaker pound driving sales.

 

Of the top 10 suppliers of food to the UK, only two, the US and Thailand, are outside the EU. France tops the list followed by the Netherlands, Germany, Ireland and Italy.

EU’s largest food export markets in 2019

UK

€39.2 bn

USA

€24.1bn

China

€14.7bn

Switzerland

€8.5bn

Japan

€7.6bn

Russia

€7.1bn

Norway

€4.7bn

Canada

€3.9bn

Saudi Arabia

€3.8bn

Australia

€3.5bn

Source: European Commission and HMRC. UK figures January to December 2019. Others December 2018 to November 2019

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