Scottish food and drink exports see substantial increase - David Thomson

I am delighted to see positive signs that Scotland’s food and drink businesses are starting to recover from the supply chain problems caused by the pandemic and the new UK-EU trading relationship.

The Food and Drink Federation’s recent UK exports report shows Scotland’s food and drink exports saw an increase of 15 per cent in 2021. This is great news. I am proud that we in Scotland continue to punch above our weight – accounting for the largest share of UK food and drink exports at an impressive 30 per cent.

Iconic oatcake manufacturer Nairn’s are one Scottish business enjoying strong export growth, leading them to win the Queen’s Award for Enterprise in International Trade. They export to more than 35 markets, including the Republic of Ireland, USA, Canada, New Zealand, Portugal, China, the Middle East, Cyprus and the Netherlands. Nairn’s has seen a 600 per cent increase in export sales over the last ten years – with increased international sales an important part of their long-term growth strategy.

Despite these successes it remains a challenging time for food and drink businesses. The Ukraine War is having an impact on raw material and energy costs and inflation is hitting them hard. We’re yet to fully understand the ongoing impact on food and drink exports and on the global supply chains on which our sector relies for some ingredients, such as vegetable oils, cereals and white fish.

David Thomson, CEO, Food and Drink Federation (FDF) Scotland

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The UK’s break away from the EU has also brought about challenges but it is encouraging to see the share of exports to non-EU markets increasing in Scotland. As an example, exports to China nearly doubled in 2021 to just under £225m. There are big opportunities to drive further export growth through new trade deals, however more must be done to improve the UK-EU trade agreement to help companies recover exports in the EU. For example due to changes in rules Scotland’s critical seed potato sector can no longer export. This needs to be resolved. The paperwork and processes needed to export food and drink also need to be simplified, as well as reducing the costs for businesses.

One business that has been badly hit by Brexit is Sutherlands of Portsoy who export their smoked salmon to customers around the world. Some of their smaller customers in the EU were forced to choose between a hefty premium due to increased costs of exporting to them or going without. Sutherlands currently export to France, Germany, Italy, Spain, Singapore and India but this tends to be seasonal leading to inconsistent demand.

This means that they are looking more at niche products to create year-round customer interest. The business is currently in talks with customers in Israel, Greece, Qatar (which opens up areas like Iraq and Iran) and Romania. They are also looking at new export opportunities in Japan and Indonesia.

Businesses like these – from Nairn’s export success to Sutherlands of Portsoy’s flexing to find new customers – show Scottish exporters at their best. In an incredibly challenging time the Food and Drink Federation will continue to work with Scottish and UK governments and partners to set our businesses up for success. We are asking governments to look again at the potential impact of upcoming regulation on our food and drink businesses which is adding to the costs of our food for hard pressed shoppers as well as adding extra burdens to our businesses during these challenging times.

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David Thomson, Chief Executive Officer, Food and Drink Federation Scotland

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