A UK trade and investment strategy for food and drink

Why we need a UK trade and investment strategy for food and drink

UK food and drink is a success story that sits at the heart of our country’s social and cultural fabric. Our industry is creative, innovative and diverse, providing consumers with unrivalled choice and variety throughout the year, and with both nourishment and pleasure. Our products are found in every household across the UK and – more and more – in households across the world.

Moreover, food and drink is part of the UK’s critical national infrastructure and is the UK’s largest manufacturing sector, employing nearly 500,000 people and contributing almost £30 billion to the economy. Much of what we produce is made locally, but we are nonetheless rooted in global trade, with both importing and exporting an essential part of what we do. Our industry’s balance across imports and exports adds to the robustness of the UK’s food security and ensures that consumers enjoy a wide range of choice at competitive prices.

The UK’s food and drink exports ensure our sector’s reputation for quality, integrity, innovation, choice and competitiveness is accessible globally. They reflect our food heritage and culture, in every nation and region of the UK, and range from much-loved favourites to bold, innovative products at the forefront of environmental sustainability. But there is significant untapped potential to grow our exports further. If we can achieve this, our industry’s unique footprint means we are well-placed to deliver the benefits of international trade in every community, urban and rural, across the UK.

At the same time, imported ingredients and raw materials complement local produce in added value products that offer more sustainable export opportunities than commoditised trade. Imports help ensure security of supply for producers, enabling them to manage the inherent risk and uncertainty of seasonal production and variable climate conditions.

Given our roots across all aspects of trade, the debate about standards is central to us. Polarised and binary positions, and the risk these harden further, don’t help us. We don’t agree that the UK cannot do trade deals with countries that do not mirror our own domestic production standards. Nor do we agree that the imperative of free trade should prevail over the UK’s high standards and their importance to manufacturers and consumers. This strategy provides a route map for a sensible, middle way, recognising that neither of these binary choices work for the good of the UK. Ours are, we hope, workable and practical solutions that will help our sector – and the UK’s economy more broadly – prosper and thrive.

We invite UK government and the devolved administrations to work with us in taking forward a plan that will deliver on our industry’s trade potential.

The FDF trade and investment strategy in seven arguments

1. Coming out of the EU requires the UK to consider how it reframes a trade policy customised to the UK’s specific strengths, trade profile and priorities for food and drink standards. This will enable the UK to bring a consistent set of aims both to FTA negotiations and to its wider trade policy for food and drink.
2. Imports have to be at the heart of this policy, for the simple reason that the UK is, and probably will always be, a net food importer. How it taxes imported food, how it creates resilience and delivers value for consumers with a mix of domestic and imported production and how it enforces high standards for imported food need to be at the heart of its trade policy. The UK should only tax food imports when there is a clear supply resilience, sustainability or standards case for doing so. The report sets out a ‘3S’ system for assessing this.
3. The UK should not be afraid to link trade privileges with high standards in the way it has for labour and environmental commitments. It should pioneer approaches to FTAs that link import privileges with commitments to high standards for animal and worker welfare and food and drink production – the report contains ideas for doing this.
4. The UK food and drink export promotion strategy should target its strengths in value-added production. The UK may be a net importer of food and drink, but its comparative advantages in exports are genuinely strong. Value-add is often key to these strengths – innovative manufacturing and massively valuable brand equity. Export growth is a key driver of productivity and helps ensure continued competitive prices for consumers. Any UK export promotion strategy needs to have a clear focus on targeting these value-added products and, where necessary, defending this IP.
5. Trade policy and customs policy need to be part of the same picture for food and drink. Food is highly regulated, and trading it can be complex, especially for small businesses. Delays at borders add significant costs, adding to food waste by reducing the shelf lives of many food products. The reason that the FDF strategy focuses so heavily on digitalisation and simplification in the customs system is because the biggest obstacle to trading food can often be the practicalities of moving it across borders.
6. The UK should champion regulatory cooperation on food and drink with its most trusted trading partners. No two states regulate food in exactly the same way. But many states pursue the same basic aims and outcomes in food regulation. The UK should champion using this basic insight to unlock simplification in food and drink trade through a ‘mutual regulatory reliance’ approach.
7. The UK should leverage trade policy to help encourage inward investment in food and drink. A strategic approach to imports, a pro-innovation domestic ecosystem and a network of carefully chosen preferential trade agreements can all help make the UK the best place in the European region to locate investment in food and drink innovation and production.

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