News

The MP David Rutley, a former Asda and PepsiCo executive, has been appointed as Parliamentary Under Secretary of State for Food and Animal Welfare  at the Department for Environment, Food and Rural Affairs (DEFRA) with responsibilities to include:

• EU exit readiness
• Food chain - with the lead for Food and Drink Industrial Strategy

It is understood that the Minister has been appointed to oversee the protection of food supplies through the Brexit process amid concerns at the impact of a no-deal departure from the European Union.

Rutley's former roles include running home shopping and e-commerce businesses at Asda, He said: “It is an honour to join the Defra ministerial team at such an important time. I am determined to ensure that we fully realise the opportunities of leaving the EU.”

In the first half of 2018, UK exports of all food and drink hit £10.68bn, up 5.1% on the same period in 2017, led by growth to the EU27.

Exports to EU countries (+7.3%) grew at a faster rate than those to non-EU countries (+1.6%).

UK export growth to Japan and the US is being outpaced by both Spain and Ireland, and more support is needed.

From 2015-2017, growth of the UK's food and drink exports to Japan (+10.4%) lagged behind nations including Ireland (+153.3%), Spain (+31.3%), Germany (+28.3%) and Denmark (+13.7%).

In comparison, UK sales to China, where certain sectors benefit from in-market specialist support, have grown by 94.7%, experiencing far greater growth than Spain (+42.5%), Ireland (+40.2%), Denmark (24.5%), and Germany (+12.3%).

Fastest export growth seen in Singapore and Australia

Singapore and Australia were the fastest growing markets for UK food and drink exports, within the top 20 markets, with growth of 22.5% and 19.3% respectively. The top five UK products sold to Singapore were whisky, wine, gin, chocolate and sweet biscuits. For Australia, exports of gin were up 115% and soft drinks were up 99%, while outside of the top 10 products, pasta sales rose 257%.

Significantly, food and drink exports to China, Australia, and Singapore all grew in excess of 40% between H1 2016 and H1 2018 (46.5%, 48.7%, and 42.1% respectively). Of these, China and Australia are on the list of UK Government priority exports markets as set out in Defra's International Action Plan, with campaign activities running between 2016 and 2020.

Strong exports growth continues

These half year figures reveal that exports of all food and drink grew by 5.1% to £10.68bn. As in Q1 2018, total exports to EU markets grew faster than those to non-EU markets, up 7.3% compared to 1.6%. The top five export markets made up over half (52%) of overall food and drink exports, with exports to Ireland alone making up 18.4%.

The fastest growing UK products by value within the top 10 were breakfast cereals, gin and beef. Exports of branded goods over the six months rose by 4.6% to £2.8bn. Over the past 10 years, from H1 2008 to H1 2018, total food and drink exports have grown by 75%, with an average annual growth rate of 5.2%. Over the same period, exports to non-EU countries grew faster (109.3%) than to EU countries (59.3%).

The full exports report, including supporting information about H1 2018 food and drink exports, and exports reports from previous quarters can be found on our Exports pages here. Supporting case studies can be found here.

Ian Wright CBE, Chief Executive, Food and Drink Federation, said:

“This analysis of UK food and drink exports in the first half of this year reveals several great success stories and a number of areas with room for growth. Food and drink sales are flying the flag for the UK around the world. However, some of our competitors are outshining us. It's clear that focusing export support on specific product sectors can transform performance. With great uncertainty still hanging over our future trading relationship with our largest food and drink market – the EU – now is the time for the Government to back UK food & drink exports with the kind of turbo- charged support that FDF has proposed.”

Elsa Fairbanks, Director, Food & Drink Exports Association (FDEA), said:

“We are greatly encouraged by such a positive performance for food and drink exports both in the EU27 and wider global markets. The figures confirm the need for Government to ensure that the success of our exporters is not damaged by a failure to maintain the current ease of trade with our key markets in Europe after the end of March 2019.

“The recent performance is testament to our industry's commitment to maintain and grow business in core EU markets whilst at the same time, investing resources to build longer term opportunities worldwide. We should not underestimate the risks that are being faced. We fully endorse the FDF's proposal for a Sector Deal for the industry and look forward to a positive decision on this.”

Source - Food and Drink Federation - www.fdf.org

Kroger is launching a shop this week on Tmall Global, owned by Alibaba.com, which features international brands.

The deal will allow Kroger to keep pace with rivals including Walmart, which has also announced partnerships to expand in Asia including an investment in India with the e-commerce operator Flipkart.


Read more here

Revised food safety standard

The updated international food safety standard: BS EN ISO 22000:2018 Food safety management systems. Requirements for any organization in the food chain has now been published by BSI in the UK to help producers make sure food is consistently safe to eat. Key revisions include an update to the structure so it’s compatible with that of other international standards. Changes have also been made to the planning cycle, the operating requirements structure and the approach to risk. Find out more at BSI’s webinar on 25 July, sign up for “ISO 22000:2018 - What’s new? And the benefits to your organization” here

Retailer brands keep gaining popularity across Europe. The latest Nielsen data shows that market share for private label increased last year in 12 of the 19 countries tracked for PLMA’s 2018 International Private Label Yearbook, and now stands at 30% or above in 17 countries.

Private label reached an all-time high in Europe’s largest retail market, Germany, with its market share there climbing to over 45% for the first time. Market share also increased to its highest levels ever in six other countries: The Netherlands, Belgium, Sweden, Norway, Hungary and Turkey.

The gains came even in countries where private label already had very high penetration. Market share for retailer brands climbed in the United Kingdom, Germany, Belgium and Portugal, where share was more than 40%.

In the UK, where supermarkets are investing in their private label programmes to meet competition from the discounters, market share climbed to more than 46%. Private label’s share has remained above 40% there ever since Nielsen began compiled data for PLMA in 1997.

Private label still accounts for half of the products sold in Spain and Switzerland. Market share in France remained above 30%, but declined as some retailers reduced their price entry brands and moved toward more premium products.

Read more at www.plmanternational.com

The first quarter (Q1) of 2018 saw exports of food and drink rise by 5.5% (year-on-year) from £5.0bn in Q1 2017 to £5.2bn.

The full exports report, including supporting information about Q1 2018 food and drink exports, can be found on the FDF website. Click here to view

Q1 2018 food and drink export growth to EU markets (+8.2%) rose quicker than to non-EU markets (+1.2%).

Positive growth was recorded amongst all of the top ten products (including whisky, chocolate, cheese, wine and beef), apart from salmon and beer.

The latest export statistics from the Food and Drink Federation (FDF) reveal that Q1 2018 exports of food and drink have grown by 5.5% to £5.2bn, from £5.0bn in Q1 2017. Total exports to EU markets (+8.2%) grew faster than those to non-EU markets (+1.2%).

Each of the top ten product categories saw growth apart from salmon and beer, which were down £40.7m, and £16.1m respectively when compared to Q1 of 2017. Of the top ten product categories, breakfast cereals saw the fastest growth, up 30.3% to £111.2m..

Japan - UK exports of food and drink have grown over the past ten years, but at a rate below the average growth rate of exports from EU27 nations. In Q1 2018, exports to Japan rose by 5% on the previous year to £56.7m.

The Japanese market recorded significant growth in categories including sweet biscuits (119%), pork (88%), soft drinks (90%) and cheese (507%). It is hoped the Rugby World Cup in 2019 and the 2020 Olympics in Japan will present further opportunities to build on this growth and strengthen trading ties between the UK and Japan.

Elsa Fairbanks, Director, Food & Drink Exports Association (FDEA), said:

“We are greatly encouraged that 2018 has got off to such a strong start across a wide range of countries both established markets within the EU and emerging markets in Asia. Growth in our largest market, Ireland highlights the need for a frictionless border between North and South.

“It is a testament to the investment and effort that UK food and drink exporting companies are putting into international sales. Hopefully this will encourage more businesses to research new opportunities outside the UK.”

Read more at www.fdf.org.uk

March saw the announcement of the largest government restructure since China began its Open Door policy in the late 1970s. 

 A new State Administration for Market Supervision (SAMS) will be established combining the existing responsibilities of the State Administration for Industry and Commerce (SAIC), General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and China Food and Drug Administration (CFDA).

SAMS will be the key regulator in supervising market order, covering a wide number of business areas including business registration, market regulation, product safety, food safety, quality inspection, certification and accreditation.

A new State Intellectual Property Office (SIPO) will be established under SAMS to formulate China’s IP protection system and the registration of trademarks, patents and geographic indicators. With SIPO being an affiliate to SAMS, it is hoped that the office will have greater resources to handle administrative cases relating to intellectual property and enforcing intellectual property rights.

The creation of SAMS is China’s latest effort to reform market regulators at the central government level. Historically, the regulation of market activities has involved different government bodies with scattered regulatory functions. This has proved inefficient and resulted in complicated compliance requirements for companies.  

Other reforms proposed are for:

• The General Administration of Customs to take over responsibility for entry-exit inspection and quarantine (previously part of the AQSIQ’s duties)
  
• The Ministry of Agriculture will be abolished and the Ministry of Agriculture and Rural Affairs will be formed to drive the development of agricultural sector and rural areas
  
• The reform may take up to 2 years to be fully completed and during this time companies are advised to keep an eye on the progress and spend some time understanding the changes that will affect their performance in the market as well as facilitate communication with the new government bodies. 
  

China Britain Business Council can help! 

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