New business survey finds Brexit barriers hit profits for more than half of small and medium UK food and drink manufacturers exporting to the EU

Britain’s small and medium-sized food and drink exporters to the EU say post-Brexit trading red-tape has hit profits.

A survey of 600 small and medium-sized food and drink manufacturers across Great Britain found that 55% of SME exporters to the EU and 47% of importers reported lower profitability following the introduction of new trading requirements in January 2021.

The findings come as the government negotiates a new food and drink agreement to make trade with Britain’s largest trading partner easier and cheaper and deliver benefits for British businesses, ahead of the UK-EU summit on 20 November.

This week, Environment Secretary Angela Eagle is visiting SMEs to see first-hand how reducing trade barriers with the EU can help SME businesses such as Provender grow, expand exports, and create jobs.

The government wants to see growth in every postcode, with food and drink firms of every size sharing in it.

Smaller businesses - often family-run firms - have been particularly exposed to the costs of complex paperwork, border checks and delays, with fewer resources to absorb the additional burden.

Of the SMEs that have stopped trading with the EU since 2021, 69% of exporters and 55% of importers said Brexit was a major reason. But the research also points to an opportunity to revive trade.

For firms that have waited years for a fix, it offers hope that things can get better for small business bottom lines.

Some 58% of food and drink manufacturing SMEs said a new UK-EU food and drink agreement could help them increase, resume or begin exporting within a year, with half saying the same for imports.

Behind every one of these figures is a family firm that should be selling great British produce abroad but is instead stuck in paperwork. It’s exactly why we are doing a deal with the EU to cut red tape and ease pressure on food price inflation, and we will keep working with businesses of every size to make trade easier. This is a government backing British businesses and jobs and easing the cost of living.

— Environment Secretary Dame Angela Eagle

Lower costs for businesses can help ease pressure on food price inflation, giving families more room to breathe.

When asked what would make the biggest difference to enhancing or establishing exports to the EU, food and drink manufacturing SMEs overwhelmingly identified less paperwork (79%), lower trading costs (78%) and fewer border delays (71%) as their top priorities. SMEs identified the same priorities for imports from the EU, at 68%, 65% and 64% respectively.

Alongside negotiations, the government is considering what practical support businesses need to take advantage of easier trade. Clear guidance was rated extremely or very influential by 71% of exporters and 61% of importers, ahead of trade promotion or training. The government is working with trade bodies and local business networks so that support reaches firms in every part of the country.

Leaders also met in Dublin on 12 November for the ninth meeting of the European Political Community, bringing together European heads of state and government for discussions on security, stability and prosperity across the continent.

Notes to editors

• The research was carried out by ICF for Defra, surveying 600 food and drink manufacturing SMEs across Great Britain (England, Scotland and Wales) and can be found on GOV.UK at EU Trade Opportunities for Food and Drink SMEs under a UK-EU SPS Agreement - DO0157^[1]

• Survey findings reflect businesses’ own reports and stated intentions.