Brexit: food and drink exports to EU suffer ‘disastrous’ decline
Exports of food and drink to the EU have suffered a “disastrous” decline in the first half of the year because of Brexit trade barriers, with sales of beef and cheese hit hardest.
Food and Drink Federation producers lost £2bn in sales, a dent in revenue that could not be compensated for by the increased sales in the same period to non-EU countries including China and Australia.
Dominic Goudie, head of international trade at the FDF, said:
“The return to growth in exports to non-EU markets is welcome news, but it doesn’t make up for the disastrous loss of £2bn in sales to the EU. It clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support.”
He said the difficulties now facing British food and drinks manufacturers and farmers was compounded by the lorry driver and warehouse workers shortages, which were choking the supply chain.
“At the same time, we are seeing labour shortages across the UK’s farm-to-fork food and drink supply chain, resulting in empty spaces on UK shop shelves, disruptions to deliveries and decreased production,” Goudie said.
“Unless steps are taken to address these issues, the ability of businesses to fulfil vital export orders will be impacted.”
By product category, the biggest falls in sales to the EU have been in dairy and meat: beef exports were down 37%, cheese down 34% and milk and cream down 19% in the first half of 2021 compared with the equivalent six months in 2019.
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Full story: Barratt’s profits surge amid strong demand for new homes
Barratt Developments has said strong demand for houses across the country helped to boost annual profits by nearly two-thirds in its latest financial year, as it signalled continued strong demand for housing across the UK even as the government pulls back coronavirus pandemic support.
Britain’s second-largest housebuilder by market value, reported profits before tax of £810m for the year to the end of June, compared with £490m in the previous year, and said a strong forward sales book was encouraging for the year ahead.
Barratt’s revenues for the financial year at £4.8bn were only 1% lower than the equivalent in 2019, before the effects of the pandemic. It completed 17,200 houses, only 600 behind 2019 and 4,600 ahead of the 2020 financial year, which included the first national lockdown.
David Thomas, Barratt’s chief executive, said the company had made “excellent progress this year”.
“We have begun the new financial year in a strong position and, whilst there are still uncertainties ahead, our strong balance sheet, forward order book visibility and construction activity to date all stand us in good stead. There is very strong demand for houses across the country.”
Barratt is also experiencing the impact of rising raw materials costs (with timber, cement, bricks, steel and copper having all jumped in price).
Russ Mould of AJ Bell says:
“Further price increases would help the builder offset increases in input costs which the company says are proving persistent (despite central bankers’ insistence to the contrary. Barratt’s results presentation flags its expectation that input costs will rise by 4% to 5% in the year to June 2022.
“However, price increases raise the question of affordability. The stamp duty break has helped here and so has Help-to-Buy.