Tuesday 23 March 2021

Massive drop in Food exports to the EU in January

The Food and Drink Federation has published a paper (no link yet because I can't find one) about food exports to the EU which is doing the rounds on Twitter and in the media. It shows a huge drop in January with exports of salmon down 98%. It could hardly get worse could it.  This is against the backdrop of a government that claims things are getting back to normal.  I am sure things are getting better, where do you go after a 98% fall in sales after all?  But what will the new normal be?

Adam Payne tweeted the best link:

Meat products were in the 80-90% bracket and food exports to Ireland overall fell 85%!  These are massive numbers. Each of the top ten products fell by between 45 and 98%, even scotch whisky fell by 63%.  And the fall was pretty uniform across the EU27.

Payne's report in Politics Home says this:

"Food & Drink exports to the EU in the first month of this year dropped by 75.5% compared to January 2019, according to the FDF. This sharp fall in sales equated to nearly £750m. 

"Exports to non-EU countries fell by a much smaller 11.1%, however, meaning the decline can't be attributed to the Covid-19 pandemic alone."

This is the key part. It echoes what UKTPO found across a range of other industries in their recent analysis of the trade figures.  Covid affected the food industry but not by very much. Most, if not all food plants have continued to produce throughout the lock down periods so it's no good pointing the finger at the virus.

No the problems was majorly down to Brexit.

Shadow DEFRA Secretary Luke Pollard is quoted in Payne's article saying, "Government needs to take its head out of the sand, and start putting in place recovery programmes to help businesses and cut the new swathes of home-grown red tape they've forced on food exporters."

Unfortunately, the only way to do that is to align legally with EU food standards and the ideological nutters presently in Downing Street are not about to do it.  There is no way the swathes of red tape can or will be cut for years. If anything, the problem is going to get worse because many food manufacturers are also importers of raw materials from the EU and that part of their business won't face al the paperwork until January 2022.

I must say the impact of all this on unemployment is subdued. This morning's ONS unemployment numbers show only a modest rise. Five million workers are still furloughed and I assume the food industry can use the scheme to hold on to workers who are laid off. 

But with these sorts of precipitous falls, it's difficult to know how food companies can continue employing the same number of workers for very long after furloughing ends.

Vaccines

I haven't commented much on the present crisis in the supply of vaccines because I think it's not very edifying. However, I note that Johnson was ringing round EU leaders to urge them NOT to place a ban on exports of doses from the bloc.

I can't imagine anyone more badly placed to ask a favour of the EU27. He has spent his entire life denigrating the EU and everything it stood for in terms of European solidarity. The EU has exported 41 million doses, including 10 million to the UK, while we (and the USA) have exported not a single dose.  Johnson wants to ask them to carry on as before, but I can't see that happening.

EU leaders meet on Thursday to consider their actions. They are all politicians with their own domestic opinion to consider and there is little goodwill left after last year's bruising negotiations.  He shouldn't expect much.

For the latest thinking in Brussels, this morning Mujtaba Raman tweeted:

This seems to me to be a neat solution, allowing exports to go ahead to countries whose vaccination programmes are behind the EU's while blocking exports to countries who are well ahead.

It would allow the EU to keep as much as possible in the bloc while retaining the moral high ground. It sounds good to me.


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