News

Today's publication of the 2017 export statistics offer good news for the sector.  Branded goods exports exceeded growth of all food and drink, up 12.1% and 9.7% respectively, as demand for quality UK products increased overseas. Each of the top 10 markets for branded exports saw growth in 2017. Eight out of these top ten markets are EU nations, and together these eight markets contributed over 50% of the branded exports value.

Sales to non-EU markets grew faster than sales to the EU, with the share of sales to EU markets falling from 67.6% in 2016 to 66.3% in 2017. The US was the largest non-EU market for branded UK food and non-alcoholic drink followed by Australia, spending £201.8m and £182.6m respectively.

Key non-EU markets show continued growth

The US and China are the largest non-EU markets for total food and drink exports, seeing growth of 5.2% and 29.0% in 2017, respectively

The US is the largest non-EU market for UK exports of branded goods, worth £201.8m in 2017. Within the top 10 products, UK sales of soft drinks to the US were the fastest growing product in 2017, increasing by 24.4%. Alcohol is another significant category, with the US spending £1.4bn on imports including whisky, gin, beer, wine, vodka and cider last year.

China was the fastest growing market in the UK's top 20 exports markets for branded goods, up 40.3% to £118.8m. Over the past 20 years, UK exports of branded goods to China has increased by 2823%

Read more at www.fdf.org.uk

Download the full 2017 snapshot here - (pdf)

See below for an extract from Secretary of State Michael Gove setting out his vision on the future of our farming industry at the Oxford Farming Conference 2018:

Food and Drink is the UK’s biggest manufacturing sector and one of its fastest growing with an increase of 8% in exports to the EU and 10% in exports outside the EU in the first three quarters of last year alone.

That success has been built on a reputation for quality and provenance, on the knowledge that we have among the highest environmental and animal welfare standards of any nation on earth. So people know when they’re buying British they’re buying food which is guaranteed to be high quality and more sustainable.

That’s why it would be foolish for us to lower animal welfare or environmental standards in trade deals, and in so doing undercut our own reputation for quality. We will succeed in the global market place because we are competing at the top of the value chain not trying to win a race to the bottom.

And Government can help in that process by under-writing that reputation for quality.

Which is why I want us, outside the EU, to develop new approaches to food labelling. Not just badging food properly as British, but also creating a new gold-standard metric for food and farming quality.

There are already a number of ways in which farmers can secure recognition for high animal welfare or environmental standards from the Red Tractor scheme to the Leaf mark. But while they’re all impressive and outstanding there’s still no single, scaled, measure of how a farmer or food producer performs against a sensible basket of indicators, taking into account such things as soil health, control of pollution, contribution to water quality as well as animal welfare. We’ve been in discussion with a number of farmers and food producers about how we might advance such a scheme and I think that, outside the EU, we could establish a measure of farm and food quality which would be world-leading.

Read full text at - www.gov.uk

The Food & Drink Exporters Association (FDEA) welcomes the news that transforming support for exports has been identified in the UK Government's announcement to establish a Food & Drink Sector Council as part of its Industrial Strategy.  

The opportunities and challenges for food and drink exports raised by exiting the EU are significant. 

FDEA and the Food & Drink Federation (FDF) are committed to working together to support existing food and drink exporters in growing their sales overseas, while helping and encouraging more companies to begin their export journey.

We look forward to working with stakeholders to drive forward the export remit of the new Council, which must be given the resource it needs to succeed.

See the full paper - click here

China is cutting import tariffs on 187 consumer goods including a number of food items.  The Finance Ministry said tariffs will drop from an average 17.3% to 7.7% and will take effect from the beginning of December.

Download list of food items - click here

Read more - click here

Auchan Italia has launched an awareness campaign, La Vita In Blu, which aims to help consumers make better food choices. The retailer says that the programme is based on consumer feedback and has been developed in collaboration with the medical and scientific community in Italy. Auchan says it evaluated more than 100,000 products, selecting items in each category that offer the best nutritional balance among proteins, fibres, vitamins and minerals, and contain a controlled amount of sugars, saturated fats and salt. The product selection will be updated at least every six months.

Auchan’s initiative has created some controversy in Italy, with Federalimentare, the group representing the Italian food industry, describing it as a “totally arbitrary food assessment system”. Meanwhile, the chairman of Italy’s Ministry of Health food safety committee, Giorgio Calabrese, said that “Auchan’s selection excludes many Mediterranean diet products”.


Source: Private Label Manufacturer's Association.

Major markets like Russia and Romania are the engine that drive the European FMCG branch’s growth. Discounters and convenience stores continue to expand their reach, according to the international research organization IGD.

Local retailers expand

Over the next five years, food sales will grow three times as fast in Central and Eastern Europe as compared to Western Europe. The European food retail industry will grow 3.8 % annually in that same time frame, but the annual growth for Central and Eastern Europe will be 6.5 % compared to 2.4 % for Western Europe.

"Many local retailers, including X5 Retail Group, Lenta and the discounters, have planned major expansion plans for markets like Russia and Romania, where there have only been limited market consolidation efforts. This will speed up the region’s growth”, IGD’s Milos Ryba said.

Read more at Retail Detail - click here

International Trade Secretary Liam Fox has announced that small businesses can now access government-backed export finance directly from their banks, boosting UK trade.

UK Export Finance (UKEF), the UK’s export credit agency, is on Monday 16 October launching a new partnership with 5 major high street banks allowing smaller businesses to access millions of pounds in government-backed trade finance directly from their bank in seconds.

UKEF, as part of the Department for International Trade, provides financial support to help UK companies sell to international customers. This new partnership with Barclays, HSBC, Lloyds, RBS/NatWest and Santander, announced by Liam Fox in July, comes as the Board of Trade met for the first time on 12 October


Read more at www.gov.uk

Value Added Tax (VAT) is due to be introduced in the UAE and wider-GCC on January 1st 2018. VAT will be charged on:

• Supplies of goods and services by a taxable person (a person who is registered or required to be registered for VAT) where the supplies are made within the same GCC member state in the course of carrying on a business.
  
• The importation of goods from outside of the GCC.
  
• The exportation of goods or services to outside of the GCC – although these supplies will be zero rated.
  
• The receipt of good and services cross border within the GCC – by the application of the reverse charge mechanism.
  
• The receipt of services from outside of the GCC by a VAT registered customer – by the application of the reverse charge mechanism.
  

More details can be seen on the website of the UAE Ministry of Finance  - click here

From 21st September firms across the UK will be able to take advantage of a near-total removal of tariffs on exports to Canada, as the EU-Canada Comprehensive Economic and Trade Agreement (CETA) is provisionally applied.

CETA is the most extensive free trade agreement to date. The agreement scraps 98% of import duties, giving UK companies easy access to a valuable market of more than 35 million people and opening the door for companies to strike up productive relationships for future trade with Canada.

DIT is keen for companies across the UK to take advantage of the opportunities CETA

A factsheet that summarises the changes CETA brings for the food and drink sectors can be downloaded here.

The UK Government is committed to seeking continuity in its current trade and investment relationships, including those covered by EU FTAs and provide certainty for businesses. CETA will not only boost exports in the short term, generating jobs and growth, but is also an opportunity to lay solid foundations for the UK’s future trading relationship with Canada.

The Prime Minister recently announced the establishment of a new joint working group to examine how DIT can transition the ambitious measures set out in CETA. This will be the 13th working group established across 18 countries since the EU referendum.