Written submission from The Food and Drink Federation (EUT0028)

 

FDF Response: Business and Trade Committee Call for Evidence on UK Trade with the EU

 

The Food and Drink Federation (FDF) represents the UK food and drink manufacturing industry, the largest manufacturing sector in the country. Our industry has a turnover of almost £152bn, accounting for 24 per cent of total UK manufacturing, and Gross Value Added (GVA) of £42bn. Food and drink manufacturers directly employ almost 500,000 people across every region and nation of the UK. Exports of food and drink make an increasingly important contribution to the economy, exceeding £25bn in 2025, and going to over 220 countries worldwide. The UK’s 12,130 food and drink manufacturers sit at the heart of a food and drink supply chain which is worth £172bn to the economy and employs almost 4.3 million people.  

  

 

Wider context and the UK-EU Reset

 

Core challenges the UK faces in its relations with the EU? Has the reset established the right framework to address them?

 

  1. Whilst 2025 was a successful year for food and drink exporters to the EU, seeing an increase of 6% year-on-year, export performance has remained structurally lower since the UK’s exit from the EU, as shown in our 2025 Trade Snapshot. Despite traders having had time to adjust to the drastic change in our trade relationship with the bloc, food export volumes are 31% lower in 2025, compared to 2019. This structural decline has impacted most product groups, including categories that face minor or no SPS control (such as sugar confectionery, bakery goods, and chocolate), indicating that supply chain disruptions and administrative barriers have had a significant impact.

 

  1. This impact has been felt most severely by UK exporters of food and drink products. Importers of ingredients and finished products from the EU, on the other hand, have been largely sheltered from the difficulties associated with the UK’s exit from the EU. The implementation of the UK Border Target Operating Model (BTOM) has been delayed several times, and the import regime has remained navigable for EU exporters due to the UK’s light-touch approach. The foreseen SPS Agreement will place UK importers and exporters on an even footing, helping to address the competitive advantage that EU exporters to the UK have, vis-à-vis UK exporters to the EU.

 

  1. As has been widely reported, the post-EU-exit barriers to trade with the EU have impacted Small and Medium Enterprises (SMEs) most sharply, where costs in the form of non-tariff barriers have been prohibitive to exporting. Requirements to file pre-notification declarations, apply for Export Health Certificates (EHCs), and pay port health and veterinary inspection fees have upended the cost-benefit analysis to trade with the EU for many UK food and drink businesses. As an example of this burden, according to APHA data, 243,915 applications for EHCs were made in 2025, compared to 22,990 in 2020 (an increase of 960%).

 

 

  1. Despite these challenges, the EU remains the UK’s most important food and drink trade partner, accounting for 57.6% of exports (£14.8bn). These trade patterns and the importance of the EU as an export destination are not likely to shift dramatically in the coming years. The Government is therefore right to seek improved trading terms with the EU, where that eases trade flows and reduces costs for businesses. FDF welcomed the intention to negotiate an SPS Agreement with the EU to achieve this goal.

 

  1. However, as demonstrated in the 9 March government announcement, the scope of this agreement has rapidly expanded into a considerable number of domestic legislative areas. For many businesses, this was the first instance where they were made aware of the fact that despite not trading with the EU, they would have to undergo resource-intensive re-alignment processes, ensuring the continued compliance of their food and drink products on the UK market. While FDF recognises the benefits of the agreement, government must also be aware of the intense regulatory compliance burden it is placing on businesses both in the policy area and in others. Ensuring the benefits of the agreement are realised in a way that also does not push unnecessary compliance costs onto business is key in ensuring the long-term success of the agreement during a period of inflationary pressure.

 

  1. UK food and drink manufacturers also face costly divergence from EU regulations in other fields. The EU Deforestation Regulation (EUDR) is one pertinent example of how upcoming divergence, not addressed by the SPS Agreement, is likely to lead to trade disruption. Despite the UK having been designated a low-risk country by the Commission, UK importers of RoW commodities will still be expected to submit due diligence statements (DDS) proving that products are not produced on land that has been deforested. This is of particular concern to food and drink manufacturers in the UK, who import approximately £1.1bn of products, in scope of the EUDR, annually. The Government is currently considering aligning with the EUDR, but this is yet to be confirmed. As a result, significant questions remain for UK food and drink manufacturers, particularly on the applicability and administration of the EUDR in Northern Ireland.

 

  1. Another example of divergence, relevant to food and drink manufacturers, is the EU’s Packaging and Packaging Waste Regulation (PPWR). The PPWR, in force from August 2026, will apply directly to Northern Ireland in phases. From August 2028, all products on the Northern Irish market will be required to have labelling for recycling, banning recycling labels currently used by manufacturers for products in Northern Ireland. In practice, this will likely result in GB manufacturers, which supply the NI market, aligning with the labelling requirements set out in the PPWR. In this case, timely alignment of GB requirements with those of the EU will support manufacturers in this transition and ensure continued supply to NI.

 

 

What impact, if any, has the reset had so far?

 

  1. Negotiations on the SPS agreement remain ongoing, but in order to make the required changes in the ambitious timelines set out by government, businesses will need time to begin the process of re-aligning with EU standards. To support its members, the FDF has identified over 400 pieces of food legislation where regulatory divergence between the UK and the EU has taken place since 2021. These areas of divergence touch on contaminants, pesticides, food additives, flavourings, and food contact materials.

 

  1. Given the breadth of dynamic alignment, UK food and drink manufacturers will need to plan for changes across multiple areas, including their suppliers; audits and contracts; product specifications; formulations and recipes; digital and IT systems; compliance and regulatory processes; labelling and packaging artwork; and manufacturing and production operations. This process has now started but is expected to disrupt some businesses more severely than others.

 

What reset objectives should the UK Government prioritise for delivery within the next 18 months?

 

  1. Successful delivery of the SPS Agreement would incorporate the following elements:

 

Comprehensive guidance and monitoring of ongoing EU regulations that will impact British Business: The Government has so far published a list of high-level legislative frameworks in scope of the agreement. In future, this will need to include the detailed changes (amendments, delegated acts, etc.) made to the regulations since EU-exit so businesses who have not been monitoring EU policy developments can clearly see the difference between UK and EU approaches and identify necessary changes to their operations; EU food law is constantly evolving. Successful implementation of the agreement will involve effectively monitoring changes and upcoming reviews and communicating these to UK businesses in a timely fashion.

 

Allowing sufficient transition periods for companies to adjust: Sufficient transition periods are essential to minimising disruptions to UK supply chains, particularly for long-shelf-life products that do not comply with EU regulations. This supply chain impact is also exacerbated by ongoing geopolitical considerations such as the Middle East conflict, which should also factor into Government’s thinking on this issue. Government should examine international precedent in this area, such as the agreement between the EU and Switzerland on food safety. This agreement allows Switzerland a 24-month transition from entry into force.

 

Retaining control over national legislation in specified areas: The UK has been unable to influence regulations since its departure from the EU and has actively chosen to diverge in certain areas. Where appropriate, the Government should seek carve-outs to ensure continued competitiveness for the sector, bearing in mind the UK’s clear strengths in product development and food and drink manufacturing innovation.

 

Preparing for future supply chain disruptions: Ensure there are mechanisms in place to safeguard against supply chain shocks, such as the UK having its own national measures on pesticide use in the event of a poor harvest.

 

 

 

 

 

 

II              Other Models of UK-EU Alignment and Cooperation

 

What sectors are most affected by UK-EU regulatory divergence? What (a) benefits and (b) costs has this divergence created for UK businesses and trade flows?

 

  1. Given the scope of the SPS Agreement, as outlined in the Government’s 9 March communications package, the food and drink sector has seen several instances of divergence between UK and EU law. This divergence has brought both costs and benefits. Whilst the divergence of UK and EU food standards has resulted in the introduction of trade frictions and compliance costs for agri-food traders, divergence has also allowed the UK’s agri-food businesses to explore innovative production methods, aimed at increasing the productivity, sustainability, and ultimately, the longevity of the sector. The Genetic Technologies (Precision Breeding) Regulations 2025 have streamlined approval pathways for Precision Bred Organisms (PBOs) marking a departure from the EU’s precautionary and restrictive approach to the approval of PBOs. Whilst the EU is at an advanced stage in updating its legislation on ‘new genomic techniques,’ the implementation period will remain lengthy. If the UK is to align with the EU’s PBO regulations, vital progress and research could be rolled back.

 

  1. Another area of divergence that is likely to disrupt the UK’s food and drink supply chains is plant protection products (PPPs). The FDF estimates that there are many thousands of pesticide maximum residue levels (MRLs) in the EU that are stricter than currently set in GB. Furthermore, a recent report sets out the realities of divergence in PPP regulation, estimating the losses from dynamic alignment to total up to £810 million in the first year, with the assumption that GB farmers and food and drink manufacturers will be granted a two-year transition period.

 

  1. Further risks of alignment for the food and drink sector are in contaminants legislation. In certain cases, the UK’s unique climatic conditions make alignment with EU regulations difficult or impossible. For example, UK climatic conditions impact the level of certain mycotoxin contaminants on crops and depending on the weather in a given year, some new EU levels may not be met (e.g. current EU maximum residue levels for T2&HT2 mycotoxins in oats). Agreeing to align to EU legislation could therefore pose serious problems for certain British grown crops unless a suitable mechanism is found to address differences like these as they arise.

 

What sectors would a) benefit and b) lose out most from deeper regulatory alignment with the EU, and where should the UK retain regulatory flexibility? Should alignment, where pursued, be based on the principle of dynamic alignment (that is, automatic alignment with future EU regulatory changes)?

 

  1. Given the nature of crop cycles and the longer lead times for food and drink products (up to three years), our sector will be particularly affected by dynamic alignment with the EU. Whilst food and drink manufacturers currently trading with the EU will have accounted for the divergent regimes, those operating solely in GB, or producing products specific to the GB market, will in many cases be required to alter their supply chains. In certain cases, where climatic conditions require specialised PPPs, UK companies will have to first find appropriate replacements to currently UK-compliant PPPs. To avoid unnecessary food waste and damage to the competitiveness of UK manufacturers, the Government should negotiate appropriate transition and sell-through periods, granting traders time to address the cumulative scale of changes due to dynamic alignment.

 

  1. These impacts are further compounded by significant differences in consumption patterns between the UK and the EU. A clear illustration is tea consumption: the UK market is overwhelmingly oriented towards black tea, whereas the EU market favours herbal teas and infusions. As with black tea, regulatory changes affecting plant protection products (PPPs) are likely to have adverse consequences for overseas production. Given the UK’s strong preference for black tea, and the marked divergence in consumption preferences compared with the EU, UK manufacturers and the domestic market are likely to be disproportionately affected. Following the UK’s exit from the EU and its associated regulatory frameworks, these structural consumption differences were not adequately taken into account. As a result, dynamic alignment, if implemented without appropriate transition periods or safeguards, risks imposing regulatory requirements that fail to reflect, or actively disadvantage, the realities of UK manufacturers and consumers.

 

Are there other areas where the UK and EU should consider further cooperation, such as customs arrangements, trade facilitation and the border, or digital trade? What would the benefits and trade-offs be? Should the UK actively explore the same border and trade digitalisation tools as the EU to align systems?

 

  1. In the past, the FDF has advocated for the introduction of the Single Trade Window (STW) as a measure to reduce duplication of customs administration. Current customs and safety declaration requirements ask businesses to input identical data multiple times, making a required process overly complex for food and drink traders. Introducing a simpler measure, such as the STW, to remove the need for businesses to interact with multiple government IT systems would be welcome.

 

  1. Following the announcement of an SPS Agreement with the EU, facilitating alignment between such an STW and the EU’s TRACES platform would be particularly beneficial to food and drink manufacturers trading with the EU. This will be particularly helpful if the Government is committed to maintaining its Import of products, animals, food, and feed system (IPAFFS).

 

  1. As the UK is to align with the EU’s border regime, changes will be made to the check rates and certification requirements on goods from the EU and RoW at UK border points. The UK has diverged in its risk assessments of goods from RoW, moving many products to the ‘low risk’ category. The EU maintains a stricter import policy on goods compared with the UK. Under the UK BTOM, the UK has applied preferential risk categories for multiple trading partners on products of animal origin. As a result of the commitment to operate a common border for SPS purposes, UK food and drink manufacturers are likely to see higher check rates and the introduction of additional certification on goods from RoW.

 

  1. In terms of what we may expect from negotiations with the EU, previous agreements between the bloc and third countries such as Switzerland indicate that granting appropriate transition periods, negotiating exemptions, and ensuring apt representation in future EU decision-making, are achievable.

 

 

 

 

III              Future Cooperation Frameworks and Free Trade Agreement Compatibility

Are there comparator country models (for example Switzerland, Norway, and others) for greater UK-EU alignment that the UK Government should consider?

 

  1. Switzerland’s agri-food agreement with the EU, signed in March of this year, offers a useful model for the UK’s proposed dynamic alignment. The agreement establishes a common food safety area that gives Swiss agri-food producers barrier-free access to the Single Market; provides Switzerland with access to key EU bodies and systems, including EFSA, EU risk assessments and the Animal Disease Information System; and preserves Swiss autonomy over genetically modified organisms, with exemptions from EU GMO rules for feed, seeds and foodstuffs. Importantly, the EU-Swiss Agreement outlines a two-year transition from the entry into force date.

 

  1. The FDF welcomes commitments made in the EU-UK Common Understanding, outlining the UK’s consultative role on matters concerning agrifood. Formal pathways for collaboration between the UK and the EU on food risk assessments and early warning systems will be essential in safeguarding the interests of UK food and drink manufacturers. The foreseen establishment of an EU-UK joint governance mechanism should therefore match the institutional provisions introduced under the Switzerland-EU Food Safety Protocol. Important tenets of this agreement, supporting Switzerland’s decision-shaping power, include its participation in the EFSA and the PAFF Committee:

 

    1. The European Food Safety Authority (EFSA) is an essential body for the design of new legislation around food safety. EU Member States, EFTA countries, and third countries are represented in the Advisory Forum. Switzerland and the EU Candidate Countries currently play a crucial role in contributing data on dietary exposure, shaping food risk assessments that underpin EU policy decisions.

 

    1. The Standing Committee on Plants, Animals, Food, and Feed (PAFF Committee) is where EU Member States advise on the European Commission’s draft measures on issues ranging from animal health to food safety. The PAFF Committee’s rules of procedure allow for third country representatives to attend Committee meetings. Switzerland has in the past sent representatives to various subcommittees. Currently, third country representatives cannot vote on the draft measures considered by the PAFF Committee, however.

 

 

IV              Business and Stakeholder Engagement

 

How well-prepared are UK businesses for the outcomes of the reset so far, and what more do they need from Government to plan effectively for future changes in the UK-EU trading relationship?

 

  1. Since announcing the scope of the SPS Agreement with the EU, the FDF has worked to communicate to food and drink businesses that it is not, as commonly understood, a trade agreement. Whilst motivated by a need to reduce frictions at EU and UK borders, the SPS Agreement represents an exercise in retrospective alignment and a commitment to adopt future EU legislation on food and drink. In its communications, particularly with businesses, the Government should clarify the nature of the agreement and the costs that businesses will incur from it. Clear communications on this front will support businesses in their awareness of the impacts and support their preparation for changes in the UK’s food and drink regulations.

 

  1. Furthermore, the Government should introduce robust monitoring mechanisms of upcoming changes to EU legislation, designed to provide timely and accessible information to businesses beyond initial alignment. Engaging consistently with businesses will further ensure that UK interests are clear and well-represented in EU decision-making bodies in the future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The UK Food and Drink Manufacturing Industry

 

The Food and Drink Federation (FDF) represents the UK food and drink manufacturing industry, the largest manufacturing sector in the country. Our industry has a turnover of almost £152 billion, accounting for 24 per cent of total UK manufacturing, and Gross Value Added (GVA) of £42 billion. Food and drink manufacturers directly employ almost 500,000 people across every region and nation of the UK. Exports of food and drink make an increasingly important contribution to the economy, exceeding £25 billion in 2025, and going to over 220 countries worldwide. The UK’s 12,130 food and drink manufacturers sit at the heart of a food and drink supply chain which is worth £172 billion to the economy and employs almost 4.3 million people.

 

The following Associations actively work with the Food and Drink Federation: