Unlocking New Frontiers: How Strategic Trade Agreements Are Reshaping the UK’s Export Potential

Amidst challenges, there is a silver lining for the UK's food and beverage sector. Emerging trade agreements are set to transform the industry's trajectory, offering substantial opportunities for expansion into global markets. This development not only bolsters export figures but also strengthens the nation's position on the international stage.

Post-Pandemic Struggles: A Closer Look at Current Export Trends

As the UK continues its journey toward economic recovery, the food and beverage sector grapples with lingering effects from the pandemic. Although export values have seen a modest increase, reaching £6bn ($8.1bn) in the first quarter, volume stagnation remains a pressing concern. This disparity highlights the need for strategic interventions to bridge the gap between current performance and pre-pandemic benchmarks.

According to the FDF's Trade Snapshot report, food exports from the UK are currently 20.4% lower than in 2020, while non-alcoholic beverages lag by 9.2%. These figures underscore the urgency for significant growth measures to reestablish the industry's former robustness. The EU, traditionally the UK's largest trade partner, has witnessed a decline in export volumes, with food down by 3.7% and non-alcoholic drinks by 1.7% compared to the previous year.

Potential Boost from EU SPS Agreement

A landmark agreement between the UK and EU to streamline sanitary and phytosanitary (SPS) controls offers a glimmer of hope. While still awaiting final approval, this pact could potentially elevate UK exports to the EU by 22.5%, albeit not before 2027. Balwinder Dhoot, Director of Industry Growth and Sustainability at the FDF, acknowledges this as a constructive move towards reversing declining export trends. However, he cautions against viewing it as a definitive solution, stressing the importance of securing British influence over EU regulatory decisions impacting local enterprises.

This emphasis on maintaining regulatory leverage underscores the necessity for balanced negotiations that safeguard UK business interests while fostering cooperative relationships with the EU.

Global Expansion: Leveraging Non-EU Markets

Beyond the complexities of EU trade relations, the FDF points to encouraging developments in non-EU markets. Recent trade pacts with India and the US have paved the way for enhanced export opportunities. In the first three months of 2025, the value of UK food and beverage exports to countries outside the EU surged by 10.5%. This uptick reflects the growing appetite among international consumers for British products.

Particularly noteworthy is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which took effect in December. Since then, UK soft drink exports to Malaysia have skyrocketed by 103%, accompanied by a 48% increase in sweets. Additionally, the free-trade agreement with India anticipates benefiting UK exporters of soft drinks, biscuits, and chocolate significantly. Such advancements exemplify the potential rewards of cultivating diverse trade partnerships.

Strategic Priorities for Future Growth

To sustain and amplify these positive trends, the FDF advocates for sustained governmental efforts in forging closer trade ties with partners worldwide. It calls for prioritizing British competitiveness in ongoing negotiations, ensuring that UK businesses remain agile and resilient in an ever-evolving global market. Furthermore, addressing existing trade barriers and facilitating smoother access to new international markets represent critical steps toward realizing the sector's full potential.

In conclusion, the FDF emphasizes the dual importance of eliminating trade obstacles and diversifying import channels to bolster the UK's food security. By staying proactive and adaptive, the government can harness emerging opportunities to propel the food and beverage sector into a prosperous future.