UK Food & Drink Export Performance Full Year 2012
Executive Summary
Food and non-alcoholic drink exports were stable at £12.1bn in 2012 – the same as 2011.
The non-EU markets (+4.6%) counter balanced performance in the challenging EU27 (-1.4%).
The result for the year was heavily influenced by decline in the final quarter (-5%), up to September food and drink exports were in growth by 1.8%
The combination of a contracting Eurozone in Q4 (GDP fell by 0.6%), lower demand for UK commodities and slower growth to non-EU resulted in the performance seen in the final quarter.
A key factor and one beyond the control of the industry markets was the poor UK harvest in the autumn which impacted heavily on the supply of grains available for export - the value of cereal exports in Q4 alone fell by £160m on Q4 2011.
Including alcoholic drinks, total food and drink exports were £18.7bn, 0.3% up on 2011 with the whisky sector up 1.1%.
In light of the above, it is encouraging to report that food and drink exports have remained resilient when compared against all UK products (-4.5%)
UK exports to the Eurozone were less competitive in 2012 as sterling strengthened from an average of €1.15 in 2011 to €1.23 in 2012.
The strengthening of the pound against the euro between 2011 and 2012 has been significant, impacting on the price of UK food commodities and constraining demand, particularly from the EU.
UK exports to those markets using the US dollar became marginally more competitive as sterling weakened from $1.60 in 2011 to $1.59 in 2012.
