FTAs to boost flagging exports to Australia

The Food and Drink Federation (FDF) Trade Snapshot Q1 2023 revealed a sharp decline in UK export to Australia and New Zealand – down 13% and 11.5% respectively – compared to the same period last year, a fall it attributed to the decline in alcoholic beverage sales.

However, this was seen as a temporary setback in the face of the removal of tariffs once the FTAs come into force from tomorrow (31 May), which promised to pave the way for future growth.

No tariffs, more opportunity

The FDF’s head of international trade Dominic Goudie said: “While we have seen a drop in exports to Australia and New Zealand in Q1 2023, we firmly believe the removal of tariffs through the new free trade agreements will unlock exciting opportunities for UK food and drink manufacturers. ​

“Government is taking important steps to help businesses utilise new export opportunities with the welcome announcement of additional specialist trade attachés. But more could be done to maximise opportunities for growth for domestic manufacturers, by dropping costly plans for UK-wide ‘not for EU’ product labelling and providing a dedicated trade portal to improve access to vital information.”​

The FDF report pointed to previous examples of FTAs delivering improved benefits, with the focus on the UK-Japan trade agree that came into effect in January 2021 – food and drink exports were up 58% to the country in Q1 2023 compared to the same period in 2021.

Affinity for UK products

UK Food and Drink Exporters Association director Nicola Thomas added: “Whilst markets such as New Zealand and Australia have a strong affinity with UK products, these are highly competitive countries with a strong home grown supplier base. ​

“We welcome lower tariffs, but UK companies still need to research and evaluate each country in relation to their own product category and brand aspirations. As with all markets, companies must create a robust market entry and development plan to succeed.”​

Total food and drink exports were up 9.8% to £5.9bn compared with last year, with exports to the EU seeing the most significant growth – up 13.4% to £3.5bn. Ireland was the top destination for foods from the UK, followed by France and the United States.

Whisky remained the top export in value (£1.3bn), but volume fell 13.1%. This drop in sales volume highlighted the role of rising prices in the growing value of UK exports.

Meanwhile, exports of Scottish food and drink were worth a ‘record’ £8.1bn in 2022​​, up by almost a third (30.6%) on the previous year.