Britain’s food and drink trade deficit has widened to more than £21 billion in the first half of 2026, marking the largest shortfall this century, according to analysis by the Food & Drink Federation. The deterioration reflects multiple pressures on the sector, including the ongoing effects of Brexit on European trade relationships, geopolitical disruptions in Middle Eastern markets, and tariff measures introduced by the United States.
Export volumes of food and drink fell 11.7 percent to 4 billion kilograms during the first half of 2026, approaching levels seen during the Covid pandemic and the 2001 foot-and-mouth disease outbreak. Shipments to the European Union declined 0.9 percent in value, while exports outside the EU fell 6.9 percent in value terms. Sales to the Middle East experienced significant disruption related to regional conflict, with exports to the UAE dropping nearly 25 percent. US import tariffs of 10 percent reduced cross-Atlantic sales by 16.5 percent.
Meanwhile, food and drink imports reached 19.1 billion kilograms, the second-highest level on record. Trade agreements, particularly with Australia, have increased non-EU imports by over a fifth since 2023, with Australian suppliers now delivering 25 percent more in value than a year earlier. The government’s suspension of tariffs on certain manufactured foods such as chocolate and biscuits has also contributed to higher import volumes.
Industry leaders have characterized the trade imbalance as a national concern. Farm and food sector representatives argued that the figures underscore vulnerabilities in domestic production capacity and called for long-term government support to strengthen British food production. They cited mounting pressures from rising costs in energy, ingredients, transport, packaging and labor, alongside regulatory burdens and climate-related challenges, as factors constraining industry competitiveness.
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