Ireland will be crucial to the UK post Brexit

Food Manufacture editor Rick Pendrous

News that full-year exports of UK food and drink exceeded £20bn for the first time in 2016 – up 10.5% on 2015 – puts what will happen after Brexit firmly in the spotlight.

Figures from the Food and Drink Exporters Association (FDEA) and Food and Drink Federation (FDF) showed that exports were stronger towards the end of the year, boosted by the falling value of the pound since the Brexit vote last June.

While the lower exchange rate helped boost UK exports, it has also made imports of raw ingredients and commodities more expensive, leading to growing food inflation at home.

Food and drink trade deficit

It has not helped the UK’s food and drink trade deficit, which grew 5.7% to a reported £22.4bn.

The FDEA and FDF attributed much of the strong export growth in 2016 to the collective efforts of the industry and government to promote UK food and drink overseas.

However, many commentators argue that government could – and should – do much more to help small manufacturers financially to attend overseas trade shows and win export sales.

Second biggest market

While, the US is the second biggest market for UK food and drink, up 13% in 2016 to £2.15bn, it shouldn’t be forgotten that the EU buys 71.4% of the total by value of UK exports, which means access to continental markets without swingeing tariffs after the UK exits the EU will be critical.

The Republic of Ireland is the UK’s biggest export market, up 8% in 2016 to £3.34bn. It is also a crucial source of food imports into the UK.

It is therefore imperative that the Republic’s economy is not damaged by Brexit and any obstacles to border movement between the north and the south created by UK’s exit from the EU are resolved as a matter of urgency

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