Britain's food and drink sector is facing weaker overseas demand at a time of rising domestic production costs and tougher trade conditions. First-quarter 2026 export volumes fall 8.9% from a year earlier, reaching their lowest level in a decade outside the worst period of the COVID pandemic.
Highlights
- UK food and drink exports fell 4.8% year-on-year to £5.7 billion in Q1 2026, with volumes hitting a 10-year low outside the pandemic.
- Exports to the EU declined 6.9% in volume amid ongoing Brexit-related frictions, while shipments to the U.S. dropped 27.9% in value due to 2025 tariffs.
- UK food and drink imports increased 2.6% in value to £16.3 billion, with imports from the U.S. rising 11.5%, underscoring a growing sector trade imbalance.
First-quarter trade decline and policy warnings
According to Reuters, as reported by the Food and Drink Federation, food and drink exports from the UK fall 4.8% year-on-year in value terms to 5.7 billion pounds in the first quarter of 2026, while export volumes drop to a 10-year low outside the pandemic period.The industry body, which represents more than 12,000 businesses, says UK manufacturers are losing ground to global competitors. It urges the government to prioritise a more competitive business environment and help companies make better use of global trade agreements.
The FDF also warns that proposed UK tariff suspensions on products such as chocolate, biscuits and jams risk worsening conditions for domestic producers. It says higher UK costs, from energy to employment, alongside increased regulation, are adding to the pressure on the sector.
EU and U.S. trade add to sector strain
Trade with key overseas markets continues to weigh on the industry's outlook. Exports to the EU fall 6.9% in volume terms, reflecting the extra cost and complexity of trading since Brexit, while imports from the EU edge down 1.0% in volume terms.Shipments to the U.S. fall 27.9% in value terms, indicating the impact of additional tariffs imposed by the U.S. in 2025. At the same time, food and drink imports into the UK rise 2.6% in value terms to 16.3 billion pounds overall, and imports from the U.S. increase 11.5%, highlighting a widening imbalance in the sector's trade position.
Our earlier article on the paused talks to link the EU and UK emissions trading systems explained that political uncertainty in London has slowed progress and made the timetable for any agreement unclear. We noted that a potential link could materially shape cross-border carbon pricing and compliance after Brexit, but negotiations are now being reassessed amid leadership changes.
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