Food and Drink Trade Gap (Hansard, 16 July 1991)

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)
My Lords, the Government recognise that there is considerable scope for producers and manufacturers to improve their performance. To help them the Government have made great efforts to improve the 105 economic climate for business in the UK. They have set up and supported Food from Britain and provide support for exporters through the DTI/FCO overseas trade services. My honourable friend the Member for Skipton and Ripon has also been conducting a review of the further action which might be taken to tackle the food and drink trade gap.

§ Lord Gisborough
My Lords, I thank my noble friend for that Answer. In view of the fact that imports from northern EC countries exceed our exports by two and a half times, will the Government do what they can to further promote the better producer organisations and better marketing? Can the noble Baroness give, as an example, the export and import figures for Cheddar cheese?

§ Baroness Trumpington
My Lords, while I would not want to underestimate the importance which the Government attach to the food trade gap it has to be kept i z perspective. Over the past 10 years imports of food, feed and drink from all countries increased by 94 per cent. The value of our exports increased by 120 per cent. Regarding imports of cheese, including Cheddar, 202,000 tonnes of cheese were imported into the UK during 1990, 91 per cent. from the EC. Indeed, 91,000 tonnes was Cheddar imported mainly from the Republic of Ireland and Germany and also from third countries under bilateral cheese agreements.

§ Baroness Phillips
My Lords, why do we have to suffer tasteless French apples and pears when our own fruit is so good? It is very difficult to obtain British fruit. Surely we do not have to suffer this because we are in the Common Market.

§ Baroness Trumpington
My Lords, the short answer is that it is a free market and retailers buy what the public want.

§ Lord Kimball
My Lords, does my noble friend agree that the food trade gap is a major political and economic issue? Will she look at the example of our main competitor in this area, France, where a £1 billion trade deficit over five years has now been turned into a £6 billion food trade surplus?

§ Baroness Trumpington
My Lords, I should add to what I said earlier in reply to the noble Baroness. The apples which the French produce ripen at a different time from the apples which we produce. That is one of the reasons some of our indigenous foods are not available at the same time as similar products from other countries.
Turning to the French, in assessing the relative success of France in improving its balance of trade in food, it has to be borne in mind that agricultural output in that country is over twice that of the United Kingdom. The French are also concerned about their trade performance. The Centre for French Foreign Trade reported that for the first three months of 1991 exports of products of the agri-food sector fell by 7 per cent. and imports rose by 3 per cent. For the United Kingdom in the same period exports of food, feed and drink rose by 5 per cent. and imports fell by 8 per cent.

§ Lord Jay
My Lords, would not the best way of narrowing the trade gap be to reduce our food import prices by supporting the proposals of the EC farm commissioner for drastic reform of the common agricultural policy? Is it not regrettable that our Minister of Agriculture is apparently opposing those reforms?

§ Baroness Trumpington
My Lords, I thoroughly resent any criticism of my right honourable friend the Minister. He does a swell job fighting for this country wherever he goes.
Turning to the MacSharry proposals, the full implications of the latest MacSharry proposals have yet to be established. To some extent reduction of support should help to give encouragement for goods to be placed on the market or exported rather than put into intervention. However, the proposals could also lead to a fall in production, especially of milk, and that is likely to worsen the trade gap. The overall consequences cannot yet be predicted but the Government and my right honourable friend will resist any discrimination against the UK.

§ Lord Boardman
My Lords, does my noble friend agree that part of the trade gap may be attributable to the CAP under which, for example, in the case of dairy products we are limited by quota to 86 per cent. of our domestic consumption?

§ Baroness Trumpington
My Lords, it is important to ensure that our finite supplies of milk are used to produce high added-value products. Current milk marketing arrangements still result in too much milk being used for intervention products. The dairy industry is considering a move to more open and flexible arrangements which will enable it to compete more effectively in home and export markets. In 1989 the UK was 88 per cent. self-sufficient in butter fat and 104 per cent. self-sufficient in non-fat solids.

§ Lord Gallacher
My Lords, the noble Baroness referred to research into the problem by her honourable friend the Member for Skipton and Ripon. Can she say when the result of that research is likely to be made available? In the research which is being undertaken into the net visible trade deficit of £4.4 billion with the European Community in food and drink in 1990, has the growth of British retailers' own brands been taken into account? The own brands now account for 50 per cent. of the market in this country and have no or limited appeal overseas. Can the noble Baroness say whether that particular problem is being looked at by her Ministry?

§ Baroness Trumpington
My Lords, my colleague has only just submitted his report. When his recommendations have been considered an announcement will be made.
Did the noble Lord refer to weeds? To what did he refer?

§ Lord Gallacher
My Lords, I referred to the growing problem with respect to exports of the development of own brands by retailers in this country, particularly the five retailers who dominate the food market.

§ Baroness Trumpington
My Lords, the retailers are motivated by the desire to cut costs through shorter supply lines and to trace food back to source to aid compliance with the new Food Safety Act. I should like to add that I am delighted that Safeway is now selling nothing but British bacon on its delicatessen counters. Safeway tells me that that is worth £27 million a year to the British bacon industry. I fail to see why noble Lords find that amusing.