Bord Bia How will lower UK competitiveness offer opportunities for EU suppliers post-Brexit?

The UK left the EU single market on 31 December 2020. While the EU-UK free trade agreement guarantees duty-free trade, UK companies face new customs clearance procedures that add administrative costs, logistic challenges and risks of delays at the border. The EU food sector is heavily regulated, and non-EU food suppliers need to be certified before they can export agricultural products to the EU. UK food suppliers are therefore particularly exposed to the changing trade regime.

Brexit has already eroded the cost competitiveness of UK food suppliers in the EU market relative to EU suppliers, and uncertainty over the future food regulation in the UK vis-à-vis the EU has caused many EU buyers to reoptimise their sourcing and supply chains. While Brexit poses challenges for EU food exports to the UK, it may at the same time open opportunities for the remaining EU suppliers to gain market share in European markets.

The challenge

To make the most of the post-Brexit opportunities, EU food suppliers need clear and early insights allowing them to act with speed, confidence and a smart prioritisation of their efforts. We boil this down to two key questions:

1. Where are the attractive markets? EU food suppliers will need insights regarding the most attractive addressable markets to target post-Brexit. They will need to know which products and customer segments to target and where in the supply chain to focus. The answers vary from country to country and are product specific.
2. For each of the above “where-to-play” choices, there is a “how-to-win” question that needs a compelling answer. EU food suppliers will need to know how Brexit affects the winnability in each of the attractive and relevant segments (i.e. to which extent Brexit erodes UK competitiveness in relation to EU suppliers).

The solution

The most attractive markets for EU suppliers to target are segments which are affected by Brexit and where there are sizeable UK exports to the EU. Furthermore, EU suppliers should have overlapping export capability in the segment and an ability to scale up production. The most winnable markets for EU suppliers are segments where low costs, timely delivery and regulatory certainty are important buyer criteria.

To make this assessment, Implement undertook a detailed trade data analysis to map the profile and growth trajectory of UK exports across product categories and markets. We also conducted detailed expert interviews with existing buyers of UK food products to identify the most important buyer criteria in the attractive markets.

The impact

The client received an overview of priority choice segments, quick win opportunities and longer-term opportunities in the European food market. The client also achieved strategic insights into how these opportunities can be won and which capabilities are required to succeed.