The UK’s food and drink industry is facing mounting pressure after new figures revealed exports fell sharply in the opening months of 2026, while imports continued to rise, widening the trade gap and raising concerns over the sector’s long-term competitiveness.
The latest Trade Snapshot from the Food and Drink Federation (FDF) shows food and drink exports declined by 4.8% year-on-year in the first quarter of 2026 to £5.7 billion. Export volumes fell even more sharply, dropping 8.9% to 2.0 billion kilograms, marking the lowest first-quarter export volume in a decade, excluding the disruption caused by the pandemic, and the third lowest since 2000.
Meanwhile, food and drink imports increased by 2.6% to £16.3bn during the same period, highlighting the growing imbalance between goods entering and leaving the UK.
US tariffs hit non-EU exports
The downturn was driven largely by weaker demand outside the European Union, with non-EU exports falling by 11.5% compared with the first quarter of 2025.
Exports to the United States experienced one of the steepest declines, falling 27.9% in value following the additional tariffs introduced by the US in April 2025.
At the same time, imports of American food and drink products into the UK rose by 11.5% to £419.5 million. As a result, the UK’s food and drink trade surplus with the US has dropped by 69.3%, falling from £359m to £110m in the first quarter of 2026, its lowest level since Brexit.
The FDF also warned that proposed UK government tariff suspensions on imported products including chocolate, biscuits, jams and spreads could further strengthen US exporters, while British manufacturers continue to face higher costs when exporting to America.
Exports also declined to countries covered by recently agreed trade deals. Shipments to members of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) fell by 11.3%, while export volumes to India dropped 16.6%, highlighting concerns that businesses are not yet fully benefiting from new trading arrangements.
Rising costs continue to squeeze manufacturers
The report also highlights growing pressure from rising production costs.
Imports from non-EU countries increased by 4.2% in value during the first quarter, while imports from the EU rose by 1.9%.
According to the FDF, the cost of importing ingredients and raw materials, including plastic packaging, is now 38.6% higher than it was in January 2020. Combined with higher energy prices and increasing regulatory requirements, manufacturers are facing sustained cost pressures.
The organisation said the combination of falling exports, rising imports and higher production costs suggests UK food and drink businesses are finding it increasingly difficult to compete both domestically and internationally.
Calls for government action
The FDF is urging the government to take action to improve the competitiveness of UK manufacturers, warning that current proposals to remove tariffs on imported finished food products could further disadvantage domestic producers.
Karen Betts, Chief Executive of the Food and Drink Federation, 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. The UK produces world-class food and drink, drawing on our heritage and our reputation for innovation, but we have to be able to remain competitive overseas against local products. The costs of producing food and drink in the UK are higher than in many competitor economies, from energy to employment, and constantly changing regulation only adds to these.
“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 government’s current proposals to remove tariffs on imported food risk making a bad situation worse. It is very undermining of UK businesses and of the people they employ, and it undermines the UK’s food security in the longer term. Government should suspend tariffs on ingredients rather than manufactured products, to lower the cost of producing food here in the UK and to help businesses keep prices down for consumers.”
EU trade continues downward trend
Exports to the European Union also continued to weaken, with export volumes falling by 6.9% compared with the first quarter of 2025, extending a decline that has persisted since 2019 as businesses continue to navigate post-Brexit trading requirements.
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The UK’s two largest export markets within the EU also recorded falls in value, with exports to Ireland down 6.3% and France down 5.8%.
The FDF said the planned Sanitary and Phytosanitary (SPS) agreement between the UK and EU could help reduce some of the administrative barriers to trade by removing certain certification and inspection requirements.
However, it stressed that businesses need greater clarity on how and when the agreement will be implemented to fully benefit from the changes and help revive exports to the UK’s largest trading partner.
