UK F&B sector will ‘reap substantial benefits’ from Free Trade Agreements with Australia and New Zealand, says FDF
Food and drink manufacturers in the UK are ‘poised to reap substantial benefits’ as a result of the new Free Trade Agreements with Australia and New Zealand coming into play on May 31, says the Food and Drink Federation (FDF).
The organisation’s statement comes following the release of its Q1 2023 Trade Snapshot which shows a sharp decline in exports to both countries. According to the report, exports from the UK to Australia were down by 13%, and by 11.5% to New Zealand.
Such a drop largely comes as a result of a fall in sales of alcoholic drinks compared with the same period in 2022, says the FDF. It describes the decline as a ‘temporary setback’, which the UK should recover from with the abolition of tariffs under the new FTAs.
Head of International Trade at FDF, Dominic Goudie said in a statement: “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.”
Despite the decline in trade to Australia and New Zealand, total exports in the first quarter of 2023 were up by nearly 10%, according to the Trade Snapshot, reaching a value of £5.9 billion. It reveals the main driver for the increase was double-digit growth in exports to the European Union.
On the other hand, the FDF report also reveals how rising food prices in the UK have caused volume sales to fall for most of its top 10 exports, including whisky, chocolate, cheese, salmon, breakfast cereals, gin, wine, pork, and beef.
While the FDF predicts the UK food sector to become more competitive in an international market as a result of the new FTAs, others have urged food companies to ensure their products can compete with those that already exist in Australia and New Zealand.
UK Food and Drink Exporters Association director Nicola Thomas explained: “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.”