When the UK entered lockdown back in March there were national fears of food and drink shortages, as packs of pasta and rice were swept from the shelves.
However, the food and drink industry has largely ridden the storm and managed to maintain supplies for UK shoppers throughout the pandemic.
Yet, with global supply chains still liable to a second spike and the looming changes to UK-EU trade rules post-transition, the industry is not without its challenges.
The Daily Update today (6 August) looks at the four key sectors for food and drink exports in the UK, summarising their latest state of play.
1. Meat
UK meat suppliers have expressed concern that sales to Europe could collapse if an agreement isn’t reached for mutual recognition of road transport permits for hauliers, the Grocer reports.
Three quarters of UK delivery drivers do not have a European permit, which they would need to apply for through the European Conference of Ministers of Transport (ECMT) scheme.
A possible haulier shortage would harm the meat industry in particular, because many exporters rely on being able to send meat flexibly and quickly to European markets.
“Many of our lamb suppliers are delivering to five or six different customers, sometimes across two or three member states, because we’re able to deliver lamb as quickly as domestic suppliers in their own market,” Peter Hardwick, trade policy advisor at the British Meat Processors Association, told the Grocer.
Hardwick said a failure to reach mutual recognition of permits would be “highly disruptive” and could see the UK lose its “competitive advantage”.
However, some meat producers could benefit from the trade deals the UK is negotiating as a newly independent trade nation.
The Sun reports Japan is set to lower tariffs on bacon in a deal that could be signed imminently.
Scottish haggis producers are also hopeful of greater market access to the US, according to Food Navigator.
2. Fish
The EU continues to press for post-Brexit access to UK waters in what would be a continuation of the common fisheries policy, but environment secretary George Eustice recently said the sides remain “quite wide” apart.
Salmon exports were impacted by the Covid-19 pandemic when China halted imports of the fish from Europe, believing that the virus had been found on chopping boards in a Beijing market in June.
However, Reuters recently reported that European sales are starting to recover after officials found that salmon was not the cause.
3. Dairy
Research from the UN Food and Agriculture Organisation has found that global milk exports are set to decline 4% in 2020, on current projections. Imports from China, Algeria, Saudi Arabia, United Arab Emirates, Vietnam and Mexico have dropped most steeply.
According to the AHDB, the UK should not be too affected by this because its major export market is the EU, accounting for 91% of volumes in 2019.
However, exports of milk powders – particularly to China and Algeria – will be affected. These markets represented 10% of annual volumes and 27% of values for 2019.
For cheese sellers, the Grocer reports that some producers saw soaring consumer demand during lockdown, but smaller artisanal producers suffered due to widespread closures in the hospitality sector.
4. Alcohol
Scotch whiskies and many UK spirits producers have also had to deal with the 25% tariffs imposed by the US as part of its long running dispute with the EU over aviation subsidies.
London-based spirits giant Diageo – which accounts for 40% of the global scotch market – has nonetheless seen exports of whisky to the US increase since June last year, albeit by only 1%.
The BBC reports that, on a global scale across its wide range of spirits, beers and Guinness, exports were down by 8%, with profits down 47%.
Diageo’s managing director for Great Britain, Ireland and France has said these are the “most challenging times ever” for the drinks industry, largely due to the impact the virus has had on on-trade (sales to the hospitality industry) and sports events.
