Fine food sector remains positive despite sharp drop in exports to the Continent
Despite delays, a drop in exports and some loss of trade, independent food producers and distributors are remaining positive about the future, due to strong existing trade links with the EU and growth at home.
With some businesses largely ceasing trade with the EU, the ONS reporting a £700m drop in food and animal exports to Europe in January, and almost universal interruptions in distribution being reported, businesses speaking with FFD remain sanguine about the future.
Lake District-based Hawkshead Relish exports widely around the world and, while the company has experienced some delays and extra charges, their business with the EU has continued relatively uninterrupted.
“In terms of exports, we’re roughly the same as the same period last year,” said Jonathan Robb, general manager at Hawkshead.
Robb said the award-winning preserve maker exports large volumes to Sweden, including a range of products under a Swedish brand, and these have continued. “There seems to be a bit of tax wrangling and customs charges that the customer has had plonked on them, but they don’t seem too worried about it, so we’re not. They’re shouldering the cost at the moment.”
Distributor Cotswold Fayre lost a large tranche of its trade to Ireland due to the UK leaving the EU, with one customer importing chilled goods cancelling its contract in December and other trade deemed unviable due to “prohibitive” administration costs. Managing director Paul Hargreaves said that the loss of most of its Irish export market is being more than absorbed by strong growth in the UK. “Ireland was quite a small percentage of our total, and growth on the mainland has been so high that it’s not a huge issue,” he said.
The uptick in domestic sales has meant its suppliers will not have noticed any change in demand from the distributor, said the MD.
However, some producers are ceasing trading with the EU altogether due to the complications with deliveries and the extra administrative burden borne by exporters. One independent British sauce producer who wished not to be named told FFD that before the referendum, the brand had built up a good volume of sales to the EU representing around 12% of its total turnover, but that had dropped to around 7% by the end of 2020 and has now plummeted to 2%.
“Shipping mixed-pallet orders of £1,000-£,2000 is no longer viable for any food producer,” said the anonymous source. “The effort and paperwork associated with what business we have kept make it unviable and we expect to lose it all in April after the rule tightening.”
Robb said that, while the mood at Hawkshead is optimistic about the future of trading with the EU, the tougher conditions make attracting new customers difficult and visits to foreign trade shows less appealing.