Exports of food and non-alcoholic drinks to non-EU markets rose by 12%, with more modest growth of 2.5% to EU countries, according to figures released today (September 22) by the Food and Drink Federation (FDF).
Despite pressure on British exporters from stronger sterling and falling EU gross domestic product, the food and non-alcoholic drink trade balance improved by 4.9% to a deficit of £12bn. That compares with the trade balance for all UK products, which worsened by 84% in the first half of 2014.
Total food and drink exports were down 0.5% compared with the first half of last year – mainly due to a rare decline in whisky exports, as growth slowed in Asia and other leading markets.
The UK’s biggest food and drink export markets, measured by value, remained Ireland and France.
FDF’s economic and commercial services director, Steve Barnes, welcomed the results. “Against a backdrop of challenging conditions in food retail in the UK and overall goods exports falling, food and non-alcoholic drink exports continue to grow well and individual products to certain markets are experiencing rapid growth,” he said.
The FDF had worked with government and others to boost exports by introducing new resources and expert advice, added Barnes.
Less impressive was the dent in Scotch whisky exports caused by falling demand in many major markets in Asia and the Americas, for example China, Singapore, the US, Brazil and Mexico. The Scotch Whisky Association (SWA) attributed the fall to “economic headwinds” and uncertainty.
'Anti-extravagance measures in China'
“This was due to a mixture of reasons: the well-documented anti-extravagance measures in China, economic slowdown in some markets, a stronger pound sterling and de-stocking,” said the SWA.
But in all these markets, the whisky category remains popular and the long-term prospects are good, claimed David Frost, SWA chief executive. “We are confident that Scotch whisky will continue to grow in the long-term as markets stabilise and new ones, such as emerging economies across Africa, open up. However, it is clear that in the short-run that there are economic headwinds affecting exports.”
Scotland’s cabinet secretary for food, Richard Lochhead, said: “Scotch whisky is an iconic product, though I recognise is not immune from wider current economic difficulties across the globe. I welcome the industry’s confidence in the long term future of Scotch whisky, and its continued commitment to £2bn of capital investment in Scotland.”