UK food and drink trade deficit hits £21bn, largest since 2000

Exports drop 11.7% as Brexit and Iran war bite

The UK’s food and drink trade deficit has surged to more than £21bn in the first half of 2026, the largest gap between exports and imports since 2000, according to analysis by the Food and Drink Federation released Thursday. The widening shortfall comes as export volumes fell 11.7% while imports reached the second-highest level on record, reflecting the combined drag of Brexit friction, US tariffs and disruption linked to the US-Israel war on Iran.

UK food and drink export volumes fell by 11.7% in the first six months of the year to 4bn kg, the FDF said. That level was only marginally above volumes recorded at the height of the Covid-19 pandemic and in the aftermath of the 2001 foot-and-mouth disease outbreak.

The widening deficit reflects multiple pressures converging on UK exporters. Exports to the European Union, the UK’s largest trading partner bloc, fell 0.9% in value terms amid the additional costs and complexity of trading since Brexit. Exports beyond the EU fell 6.9% in value.

Sales to the Middle East were particularly hard hit. Exports to the United Arab Emirates fell by nearly a quarter, the FDF said, driven by disruption linked to the US-Israel war on Iran. The US’s introduction of a 10% import tariff cut cross-Atlantic sales by 16.5%.

On the other side of the ledger, imports rose. Food and drink imports reached 19.1bn kg in the first half of the year, the second-highest figure on record and beaten only by the same period a year earlier. Imports from outside the EU have risen more than a fifth since 2023 as restrictions eased through new trade deals, the FDF said.

Australia now sends 25% more food and drink to the UK in value terms than a year ago, including meat, oils, vegetables and whisky, the federation said. The suspension of tariffs on manufactured foods including chocolate and biscuits this year — part of former chancellor Rachel Reeves’s package to ease the cost of living — has also raised import levels. EU food producers increased deliveries to the UK by 0.8% year-on-year in value terms, having recovered in volume since Brexit.

Tom Bradshaw, the president of the National Farmers’ Union of England and Wales, called the figures “a wake-up call.” “At a time of growing geopolitical uncertainty, we cannot afford to take our food production capacity for granted,” he said. Bradshaw added that the widening trade deficit underlined the need for a long-term plan to support British production and recognised “a simple truth that food security is national security.”

“The pressures facing farm businesses are immense, from rising costs and regulatory burdens to extreme weather and global market volatility,” Bradshaw said. “If government is serious about food security, economic growth and national resilience, it must create the conditions that give businesses the confidence to invest, innovate and grow.”

Karen Betts, the chief executive of the FDF, which represents hundreds of food and beverage producers, said pressures on manufacturers were “significant and growing” as costs of energy, ingredients, transport, packaging and labour continued to rise. Changing regulation, she said, also added to pressures on the industry.

“Our food and drink trade deficit is growing and is now the largest it’s been in over 25 years,” Betts said. “In a world beset by conflict and the ever-increasing impacts of climate change, this poses some stark questions about our food security.” She added: “When the government then chooses to remove tariffs on, for example, biscuits imported from China, it’s not surprising that they’ll be sold more cheaply here than biscuits made in the UK.”