Analysis

Tough Trading Conditions for UK Food and Drink Exporters

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The annual figures released byinternational export marketing consultancy Food from Britain show that although the volumeof products exported rose by seven per cent, the overall value of the market has droppedto £9.2bn. The strength of sterling, the Asian and Russian crises and the weakening ofthe euro have all contributed to the tough trading conditions experienced by UK exportersover the last 12 months.

Exports to non-EU markets were the worsthit, experiencing a 16 per cent decrease in total food and drink sales mainly due to thedepressed economic situation in the Far East. Meanwhile, food and drink sales to EUcountries, which account for nearly two-thirds of all UK exports, fared on the whole muchbetter with sales in the region of the 1997 figures and certain European markets such asItaly, Spain and Ireland showing increases in exports of 22 per cent, four per cent andone per cent respectively.

A number of product areas also bucked thisdownward trend in 1998. Fish exports remained buoyant, showing an increase of £73m (11per cent), sugar is up two per cent, and breakfast cereals have continued to growfinishing the year off up 11 per cent. Other 'added value' products showing anincrease include beer (12 per cent), sauces (14 per cent), table cheese (15 per cent),instant coffee (four per cent), ice-cream (three per cent) and fresh whole poultry (11 percent).

"Market has been tough"

Commenting on these latest food and drinkexport figures, Patrick Davis, Food From Britain's chief executive said: "Themarket for UK exporters across the board has been tough in 1998 and food and drink exportshave suffered as a result. However, despite these conditions, UK food and drink exportershave managed to hang onto their market shares in many of the countries in which theyoperate, ensuring that when the market does improve they are well placed to take maximumadvantage.

"The companies that Food from Britainwork with are committed to exporting their products. With intense and ever increasingcompetition for shelf space and margins in the UK, they realise that for long term growththey have to look to widen their distribution. Although the export value is down, overseasmarkets still offer a great opportunity as UK manufacturers are seen as innovators,especially in the added value areas."


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