Chinese taste for British food catalyzes exports, report shows

The rapid growth of China's middle class is providing a boost for United Kingdom food and drink exporters, according to a new report.

Exports to the Chinese mainland of UK food and drink products increased by 16.2 percent in the first half of this year compared to the same period in 2018, the UK-based Food and Drink Federation, or FDF, revealed this week.

Exports during the period reached 344.4 million pounds ($453.7 million), making the Chinese mainland the eighth-largest importer of British food and beverages and the second-largest non－European Union importer behind the United States.

"Strong economic growth and increasing urbanization in China are driving rapid growth in the middle class and, with it, the purchasing power of its 1.4 billion consumers," the FDF said.

The trend continues a recent period of strong growth in China for the UK's food and drink trade, according to the FDF.

In 2018, UK food and drink exports to the Chinese mainland grew by 10 percent year-on-year to reach 623 million pounds. That year, fish and seafood was the largest export category, with a trade value of 138 million pounds. Dairy and egg products came second, followed by spirits, meat, and cereals and fl our.

Last year, 77 million pounds' worth of pork and 77 million pounds of whisky left the UK for the Chinese mainland, making these the most popular individual export products, followed by salmon, which had a trade value of 73 million pounds.

In 2018, exports of pork, whisky, and salmon increased by 11 percent, 25 percent, and 4 percent respectively on the year before.

"While current rapid UK export growth to China is dominated by commodity sales, there is also a significant opportunity to grow sales of premium products, with an emphasis on provenance, quality, health, and sustainability," the FDF said.

The FDF added that exporting to China is "not without its challenges", and said it is working with the UK Department of International Trade and Santander Bank to streamline trade.

Santander has partnered with two UK-based consolidators that specialize in exports to China, in order to simplify the process for British companies.

Andrew Williams, head of the food and drink sector at commercial banking company Santander UK, said such efforts are crucial in an industry that is exposed to the effects of the UK's pending exit from the European Union.

"The challenges we face in the next few years are unparalleled and the market environment in which we operate remains uncertain," said Williams. "Therefore, it is key that we identify how best to harness our own growth potential and improve productivity."

In the first half of 2019, total UK exports of food and drink increased by 5.1 percent year-on-year, to 11.3 billion pounds. The FDF said this was largely driven by exports to non-EU countries, which grew by 9.8 percent, compared to EU nations, which grew by 2.3 percent.