Many food and drink exporters reading our latest exports report will be all too aware of the continued strength of the pound.
The value of UK food and non-alcoholic drink exports has fallen 5.3% to £6bn in the first six months of the year. Most of these losses are from exports to the EU (down 7.5%) as the rise of the pound against the sharply depreciated euro has made our exports less competitive in key Eurozone markets.
While it is true that, with additional worries around the situation in China, the economic outlook is challenging, it is worth remembering we are building from a position of strength.
Food and non-alcoholic drink exports have almost doubled in value over the last 10 years, outperforming overall UK exports and growing strongly even during the recession. Volumes in many categories are still up and exports of value-added goods and exports to non-EU countries are rising.
New opportunities are being created as a result of the government’s support for ambitious free-trade agreements. Exports to South Korea have doubled in value since the deal was completed in July 2011. We hope to see agreements with Canada and Vietnam implemented as soon as possible.
Innovative British manufacturers of all sizes can benefit from a strong export focus. FDF member United Biscuits has increased its export business by over 60% over the past five years, with emerging markets accounting for most of this rapid growth. Another member, Hawkshead Relish Company, now exports to over 30 different countries.
We see significant export growth opportunities for our sector. While our closest EU peers currently outperform us in terms of the share of food and drink output they export, we expect the UK to close that gap.
For small and medium-sized food and drink companies, exporting can be particularly volatile and challenging with currency fluctuations, complex licensing and labelling laws and other regulatory barriers.
That is why the FDF has partnered with the Food & Drink Exporters Association and online export community Open to Export to run a Food & Drink Export Feature on opentoexport.com from Monday 7 September.
A joint initiative between government and industry, the Food & Drink Feature is designed to provide free expert advice on a variety of exporting topics, including a very timely Live Currency Q&A on 9 September.
Our activity last year saw nearly 2,000 registrations and Open to Export receives 30,000 visits per month. It is a growing community of exporters and a fantastic resource.
Government has pledged to boost food and farming exports and a five-year strategy is currently being developed by Defra with a new Food and Drink Export Action Plan. We expect it to prioritise food and drink in trade negotiations.
With the domestic market remaining challenging, we would expect to see more and more companies seeking to take advantage of international opportunities.
Ian Wright is director general of the Food and Drink Federation