UK food and drink exports fell sharply in the first quarter of 2026, with the Food and Drink Federation (FDF) warning that domestic manufacturers are losing competitiveness in global markets amid rising production costs, trade barriers and the impact of US tariffs.

According to the FDF's latest Trade Snapshot report, food and drink exports declined 4.8% year-on-year to £5.7 billion during Q1 2026. In volume terms, exports dropped 8.9% to 2.0 billion kilograms, the lowest first-quarter export volume recorded in the past decade, excluding the disruption seen during the Covid-19 pandemic.

At the same time, imports continued to grow, rising 2.6% in value to £16.3 billion, further widening the UK's food and drink trade deficit.

The downturn was led by weaker sales outside the European Union, with non-EU exports falling 11.5% compared with the same period last year.

Exports to the United States were particularly hard hit, dropping 27.9% in value following the additional tariffs imposed by the US in April 2025. Meanwhile, imports of US food and drink products into the UK increased 11.5% to £419.5 million.

As a result, the UK's food and drink trade surplus with the US has fallen by more than two-thirds, from £359 million in Q1 2025 to £110 million in the first quarter of 2026, the lowest level since Brexit.

The FDF also warned that proposed UK tariff suspensions on selected imported food products, including chocolate, biscuits, jams and spreads, could further strengthen US exporters' position while UK manufacturers continue to face higher costs when exporting to America.

The report also highlights weaker exports to markets where the UK has recently secured new trade agreements.

Food and drink exports to members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) declined 11.3%, while export volumes to India fell 16.6%, suggesting UK manufacturers have yet to fully benefit from recently negotiated trade deals.

The FDF said greater government support is needed to help businesses, particularly SMEs, access overseas markets and maximise the opportunities created by new agreements.

Alongside weaker export performance, manufacturers continue to face rising production costs.

Non-EU imports increased 4.2% in value during the quarter, while imports from the EU rose 1.9%. The federation noted that the cost of importing ingredients and raw materials, including plastic packaging, is now almost 39% higher than in January 2020.

Combined with elevated energy prices and increasing regulatory requirements, higher input costs continue to squeeze margins across the food manufacturing sector.

Exports to the EU also remained under pressure, declining 6.9% in volume terms compared with Q1 2025 and continuing the downward trend seen since Brexit.

The UK's two largest export destinations, Ireland and France, both recorded declines in value terms, down 6.3% and 5.8% respectively.

The FDF welcomed the recently agreed Sanitary and Phytosanitary (SPS) agreement between the UK and EU, saying it has the potential to reduce border checks and certification requirements. However, the organisation stressed that businesses need clarity on implementation timelines to begin benefiting from reduced trade friction.

Karen Betts, chief executive of the Food and Drink Federation, said: "The UK produces world-class food and drink, drawing on our heritage and our reputation for innovation, but we have to be able to remain competitive overseas against local products."

Betts argued that high energy costs, increasing employment costs and regulatory burdens are placing UK manufacturers at a disadvantage compared with international competitors.

She also criticised proposals to suspend tariffs on imported finished food products, warning they could further undermine domestic production.

"Government should suspend tariffs on ingredients rather than manufactured products, to lower the cost of producing food here in the UK and to help businesses keep prices down for consumers," she said.