UK food export volumes sink to decade-low level

British food and drink firms are being squeezed at home and abroad, as exports fall, imports rise and US tariffs hit trade with one of the UK’s biggest overseas markets.

The Food and Drink Federation’s latest Trade Snapshot report shows exports fell by 4.8% to £5.7bn in the first quarter of 2026. In volume terms, exports dropped 8.9% year-on-year to 2.0bn kg, the lowest Q1 level in a decade outside the height of the pandemic.

Imports moved in the opposite direction, rising by 2.6% to £16.3bn and widening the gap between what the UK sells abroad and what it buys in.

The sharpest warning sign came from the US, where UK food and drink exports fell by 27.9% in value terms. At the same time, imports from America rose by 11.5% to £419.5m, strengthening the position of US food and drink manufacturers in the UK market.

As a result, the UK’s food and drink export surplus with the US fell by 69.3%, from £359m to £110m in Q1 2026. The FDF said this was the lowest level since Brexit and showed the impact of additional tariffs introduced by the US in April 2025.

The figures raise concerns that UK manufacturers are being hit by a combination of higher production costs, trade barriers and growing competition from overseas suppliers.

The warning will be closely watched across the wider food and farming supply chain, as weaker export performance and rising import competition risk adding further pressure to British producers.

The FDF warned that proposed UK tariff suspensions could make the imbalance worse by making it cheaper for US firms to sell products such as chocolate, biscuits, jams and spreads into Britain, while UK manufacturers continue to face higher costs exporting to America.

The wider decline was driven mainly by weaker sales outside the EU, with non-EU exports falling by 11.5% compared with the same period last year.

Exports were also down in markets covered by recent UK trade deals. Food and drink exports to members of the Comprehensive and Progressive Trans-Pacific Partnership fell by 11.3%, while exports to India were down 16.6% in volume terms.

The FDF said this showed the importance of helping manufacturers access the benefits of global trade agreements.

The report also highlighted rising costs for businesses importing ingredients and raw materials. Non-EU imports grew by 4.2% in value terms in Q1 2026 compared with the previous year, while EU imports rose by 1.9%.

The cost of importing ingredients and raw materials, including plastic packaging, is now 38.6% higher than in January 2020. The FDF said these pressures, alongside rising energy costs and further regulation, were adding persistent costs to producing food in the UK.

It warned that a “storm is brewing” for the sector, with falling exports, rising imports and high production costs putting pressure on British manufacturers.

The organisation said a sector being squeezed at home would struggle to seize opportunities in global markets. It is calling on the government to take urgent action to protect food security, support British brands and create more competitive conditions for UK food and drink businesses.

FDF chief executive Karen Betts warned that food and drink firms were struggling to compete overseas.

She said: “Food and drink businesses are part of the fabric of every community in the UK, and it’s concerning to see them struggling to compete overseas.”

Ms Betts said the UK produces “world-class food and drink”, but warned that businesses must be able to compete against local products in overseas markets.

She said production costs in the UK were higher than in many competitor economies, including energy and employment costs, while “constantly changing regulation” was adding further pressure.

Ms Betts added: “There is plenty government can do to improve the competitiveness of our food and drink exporters, many of which are SMEs, from helping companies to access the benefits of trade deals to lowering the cost of doing business in the UK.”

The FDF also criticised current proposals to remove tariffs on imported food.

Ms Betts said: “The government’s current proposals to remove tariffs on imported food risk making a bad situation worse.”

She said the move was “very undermining of UK businesses and of the people they employ” and warned it could weaken the UK’s food security in the longer term.

The FDF said the government should instead suspend tariffs on ingredients rather than manufactured products, to reduce the cost of producing food in the UK and help keep prices down for consumers.

Trade with the EU also weakened, with export volumes down 6.9% compared with Q1 2025. The FDF said this continued the downward trend seen since 2019 and reflected the added cost and complexity of trading with the UK’s closest trade partner since Brexit.

Exports also fell in value terms to the UK’s two largest overall export markets, with Ireland down 6.3% and France down 5.8%.

The proposed Sanitary and Phytosanitary agreement is expected to reduce some of this trade friction by removing the need for additional checks and certification when trading with the EU.

However, the FDF said businesses needed clarity as soon as possible so they could benefit from the agreement and begin to rebuild food exports to the EU.