Trade Snapshot H1 2026: Food and drink market analysis
Topics
FDF's H1 2026 Trade Snapshot reveals a concerning picture for UK food and drink trade. Export volumes fell to the third lowest this millennium, dropping by over a tenth (11.7%) in the first half of 2026 compared to H1 2025.
Meanwhile, food and drink imports rose to their second-highest level on record. As a result, the UK’s trade deficit now sits at £21.1bn – the largest since 2000.
FDF is urging government to address this concerning trend by:
- Improving the domestic investment environment by prioritising and simplifying regulation
- Ensuring tariff suspensions strengthen domestic manufacturing rather than favouring overseas competitors
- Ensuring food and drink businesses are able to use the range of UK free trade agreements
- Ensuring the UK-EU SPS agreement levels the playing field for UK exporters
UK food and drink exports under pressure
Exports falling to the EU
Food and drink exports fell 3.4% year-on-year in value terms, to £12.0bn, remaining only marginally above levels seen at the height of the Covid-19 pandemic and in the aftermath of the 2001 foot and mouth disease outbreak.
Exports to the EU remained on a downward trend, falling 0.9% in value terms, including a decline to the UK’s top two export markets, Ireland (-4.9%) and France (-4.6%). This is rooted in the additional costs and complexity of trading with our nearest partners since Brexit, with inconsistent application of rules across member states adding to the burden.
Global pressures on UK exports
As well as the decline in EU exports, there was a fall in non-EU exports, which dropped 6.9% in value terms. This was, in part, driven by falling food and drink exports to the Middle East as a result of the ongoing war with Iran. For example, exports to UAE fell by nearly a quarter (23.4%).
The 10% tariff imposed by the US also had a major impact, with food and drink exports to the country down 16.5%. This is likely to fall further, with the latest round of US tariffs giving EU producers a more advantageous position than UK businesses.
Imports rise to near record levels
UK food and drink imports rose 0.9% to £33.1bn in H1 2026. Food import volumes reached 19.1bn kg, the second highest level since 2000, behind only H1 2025. Non-EU food import volumes have increased by 22% since H1 2023.
This contrasts sharply with the decline in exports and points to a growing trade imbalance: overseas suppliers continue to maintain a strong position in the UK market while domestic manufacturers struggle to retain ground internationally.
22%
Why the growing trade gap matters
The UK's food and drink sector is becoming less competitive globally, while international competitors continue to gain ground in the UK market. While imports play an important role in UK food and drink production, if this gap continues to widen it risks undermining UK food security.
Opportunities in emerging markets
CPTPP expansion and Mercosur offer opportunities to help reverse the decline in UK food and drink exports. Indonesia, the Philippines, Uruguay and the UAE are seeking to join CPTPP, which could reduce tariffs that currently restrict access for UK food and drink products. With UK imports from Mercosur already worth £1.2bn in H1 2026, against £137.4m of exports, these markets represent a clear opportunity to grow UK sales, if businesses have the support to take advantage of improved access.
£1.2bn
About the research
The report draws on UK trade data from His Majesty’s Customs & Excise and covers the first six months of 2026. It compares trade values and volumes with previous periods and examines performance by product, destination and source market.
Key findings
- UK food and drink exports fell 3.4% to £12.0bn in value terms.
- In volume terms, food export volumes fell 11.7%, the third-lowest H1 level since 2000.
- Imports rose 0.9% to £33.1bn in value terms.
- US tariffs continue to disadvantage UK exporters relative to EU competitors.
- CPTPP expansion and Mercosur present future growth opportunities.
Author information
Uros Milosevic
Senior Economic Analyst
Food and Drink Federation
Who's this for?
The FDF Trade Snapshot is designed for food and drink manufacturers, exporters, policymakers, journalists, trade specialists and industry leaders. It provides evidence to support decisions on international growth, market prioritisation, competitiveness and emerging opportunities.
