British food and drink exports forecast to break £10bn barrier in 2006

Britain’s food and drink exports are set to break the £10bn barrier for the first time since 1996, according to market development consultancy Food from Britain (FFB) as it announces half year food and drink export figures. Significantly, this amount will be reached with beef exports only accounting for £23m (at the half year stage) – when British exports last reached £10bn beef exports were worth almost £600m (for the full year), indicating the strength of British food and drink exports.Total Food and Drink exports for the period January to June 2006 were worth £4.8bn, up 3.4% versus the same period in 2005 and FFB forecasts indicate that by the end of 2006 the British food and drink export market will be worth £10.2bn – higher than ever before – with positive export performances to both EU and non-EU countries. Beverages still account for a large share of the total food and drink UK export market, continuing to show stability over the period January to June 2006. Soft drinks as a whole have increased by almost a third, worth £122m, with fruit juices up by 24% to £17m. Tea also showed signs of recovery compared to last year’s performance generating an increase of 20%, to account for £75m. Exports of value added products (excluding spirits) continue full steam ahead, growing by 6.4% to reach £1.6bn. Bread, pastry and cakes stood out, rising nearly 8% to £223m, together with beer, which has fared well with an increase of 6% to £176m. Other successful sectors within the value added category were chocolate and chocolate confectionery, accounting for £124m, and cheese, totaling £109m, with both sectors being up by over 5%.”This year’s figures mark an encouraging time for Britain’s food and drink exporters,” said David McNair, Chief Executive of Food from Britain. “Having experienced positive export figures for the past six years I am confident in saying that we have reached a sustained period of growth. What is particularly exciting about the strength of the market at present is that it has been achieved largely without the contribution of red meat -traditionally a stalwart of Britain’s food exports. As meat exports continue to recover we will no doubt see further record-breaking performances.”The UK’s top three export countries, namely Ireland, France and the USA, have continued to deliver, climbing 9%, 10% and 6% respectively since 2005, while the Netherlands continues to boast encouraging figures, up 20%. Although UK exports to Spain recorded a decline of 28% over the first half of 2006, this is mainly due to the poor performance of whiskies, decreasing 49% to £58m, and cereals, down 25% to £48m.Exports to the EU as a whole reached £3.1bn, an increase of 2.7%; exports to Ireland accounted for £940m of this, and France accounted for £618m.Exports to Central Europe continued to fare well in the first half of 2006, although accounting for only 2% of total food and drink exports from the UK. Poland in particular has imported 26% more UK food and drink, and is ranked 11 among EU markets in January to June 2006. Strong performances were also registered in the Czech Republic, up 18% in the six-month timeframe, and Estonia, which showed a 77% growth rate (driven by whisky exports). The UK’s food and drink exports to non-EU markets also enjoyed an uplift, experiencing a 4.8% shift in the first half of 2006 compared to the same period in 2005, with none of the regions recording a decline. The Latin America region delivered the strongest performance, climbing 17% to nearly £171m, with Venezuela and Brazil experiencing the highest increase, both up almost 50%. Western European countries outside the EU were also important for the UK with food and drink exports worth £113m – Norway alone boasted an increase of 20% to account for £40m. Other non-EU success stories include South Africa (+34%), and North America, rising 5% to achieve the value of £504m. Although total food and drink exports as a whole show an upward trend, some product sectors have recorded comparatively poor performances, with meat in particular displaying disappointing figures, down 3% to £341m. UK beef exports, however, continue to recover in the first half of 2006, with £23m of business. Positive figures also came from the sugar and sugar confectionery sectors, up 12%, while ‘other groceries’ (+7%) and prepared cereals (+3%) each achieving significant growth. Although overall the sustained performance is very positive for British food and drink manufacturers, David McNair warns that now is not the time to be complacent. He said: “It is great that the latest export figures show a positive trend, but Britain still lags behind other countries, such as France and Germany, who continue to export significantly more than the UK. The opportunities and logistics are all in place to not only reach the £10bn barrier but exceed it convincingly, providing our producers continue to appreciate the benefits of being competitive internationally.”