Bright Business Consulting LLP

Monday, July 16, 2018

Agriculture and Food Industry in United Kingdom (UK)

The future for both Agrifood field and its exporters is still positive despite the decrease of British economy.

The UK can give great satisfaction to companies that face British market with determination and flexibility, whose key differentiation compared to other European markets is its enormous power of purchase of Mass Distribution.

In order to meet the demand for quality food products, take advantage of the opportunities arising from the UK market and the different supply chain distribution you need to be flexible and innovative. The challenge for foreign entrepreneurs who intend to succeed in the British market is to find the right formula that combines tradition and innovation. There are some interesting niches in the field of specialty food and high-class restaurants.

In the UK, which is a EU Country, there are no restrictions for any imports of food products from Italy. Naturally, the products must comply with the Community legislation in force. Regarding food VAT is 0%, with the exception of chocolate, any product containing chocolate, snacks and chips whose VAT is 20%. Wines are subjected to excise duty and 20% VAT.

Excise taxes are relatively high and they must be paid when the product enters the United Kingdom. To that end, it is essential to be registered with Customs issuing a number of duty. For this reason it is necessary to own a company established in the UK otherwise the owner must rely on specialized freight forwarders which are already registered. Specialized Importers have got the mandatory excise duty number and most of them have Bonded Warehouses.

The total expenditure of British households in consumer food products caters primarily to large retail chains,such as Tesco, Sainsbury's, Asda and WM Morrison, the so-called "Big Four" that account for about 77% of the food retail market. To complete the panorama of the major supermarket chains in the UK there are discounts on one side and chains aimed at high profile consumers on the other side, specially widespread in the South East of England.

Small businesses are able to increase their bargaining power against large-scale distribution only when they are devoted to high-quality niche products which have a great impact on the purchaser and an excellent quality/price balance. Wholesalers of limited size and small indipendent sales networks associate to create voluntary chains and purchasing groups, allowing to operate with centralized procedures for purchases and to coordinate promotional activities.

To mark is the rapid growth of e-commerce sales through the sites of retail chains and specialty web-sites. The rapid growth of this sales channel depends on the great efficiency of logistics, which allows same-day delivery in major cities of even perishable goods. The recent entry of large groups of retail branches of convenience stores highlights the renewed interest of consumers to the formula of small supermarkets just around the corner. The process ofconsolidation of independent distributors is likely to accelerate in the upcoming years. Over the last years, several initiatives have emerged to revitalizing trade in town centers and reduce the power of supermarkets and large shopping centers. A benefit for independent shops are also the regulations on opening hours, although the mainsupermarket chains, are trying different opening hours which are more extended on selected days.

The market for foreign food has in recent years sustained growing rates. The retail trade has responded to the growing demand producing lines of Private Labels, yet with few results. Despite the structure of cost and climate allow a significant local production for a number of characteristic features of food traditions of other countries, the UK may hold great satisfactions to foreign companies facing this Market with determination and flexibility, whose key differentiator compared to other European markets is the huge buying power of a few Mass distribution retailers.

To meet the growing demand for food quality and seize the opportunities that come from the British market and other supply chains foreign companies are asked to:

  • Be flexible-innovative, willing to adapt their product, packaging and label depending on British consumers different eating habits and purchasing.
  • Focus on quality and on distribution channels that work with quality-sensitive market branches, respecting the environment and ethical consumption.
  • Focus on British quality-sensitive market branches interested in food imports. About a third of UK consumers considers imported food, especially Italian one, good for a healthy diet. This range of small and medium-sized foreign companies should aim at it.
  • Plan and optimize logistics and transport to prevent them affect fruitful business relationships.
  • Invest in communication to gain the right position in the market.
  • Adapt packaging to tastes and recent market trends as well as local legislation relating to standards set by the Law and trade associations.


The local production of cold cuts is mainly focused on cooked ones. Raw sausages are in some small delis in Wales and Scotland, which offer niche products otherwise the market is dominated by imported products, especially from Italy, such as smoked ham, bacon and salamis in different sizes and with different price ranges. Regarding cooked meat, foreign products - especially Italian ones - is directly competitive with local, Irish and German production.

Cooked ham and sausage coming from Germany and Ireland are very appreciated by British customers and they are sold at competitive prices. The modest presentation of products, the lack of sellers and British clients's knowledge of them, the apparent oxidation of them displayed in the refrigerated display cases does not promote the sale of ready-sliced salami. Mass distribution proposes dozens of products, especially cooked and smoked hams, pre-packed into vacuumed trays or under modified atmosphere, in small sizes, placed with a Private Label. Hard to find in supermarkets are productions of PDO and PGI origin. These products are buyable in selected delicatesses and high-end department stores in London. Foreign products are offered to general public at higher unit prices, therefore they are less competitive than local products and their package size is also smaller.


Consumption of canned tomatoes in the UK is increasing. From 2010 to 2014 there was a growth of over 60% of imports of this product mainly from Italy. Nowadays these kind of products are available by all distribution channels. All the major chains of distribution hold a trademark for this kind of product and ask foreign manufacturers to provide their customers with canned tomato, both whole and tomato paste. This success is related to the fact that it is essential for almost all ethnic kitchens, which make up the fastest growing food-branch in the UK.


Thought of as a healthy affordable food, pasta is more and more popular in the UK. Pasta consumption is growing rapidly boosted by media with chefs promoting the basic element of Mediterranean cooking, by the decline in popularity of protein diets and by express presentation of some sizes of pasta which highlight speedy cooking.

The British market has a limited variety of pasta shapes. Private Labels dominate English distribution of pasta and supermarket chains have adopted, in recent years, very aggressive policies on prices. On supermarket shelves 60-80% of space is reserved for private labels.

The potential growth of pasta in the British market is huge, given current levels of consumption per capita each year, equivalent to 2.5 kg. Domestic production of pasta is marginal, but egg noodles is experiencing very significant expansion because chains such as Tesco and Sainsbury's supply their own branded goods manufactured in the UK. Imports of dried pasta are on the rise.


In the UK about 700 000 tonnes of cheese are consumed every year including Cottage Cheese and Fromage Frais; ruling out these two types of cheese, consumption is 600 tons per year with a yearly per capita consumption of about 27 grams. Cheese has a British household penetration of about 98%. The favourite kind is Cheddar Cheese (330 000 tons of annual consumption). The second kind, in order of preference, is mozzarella-cheese, mostly locally produced. Growing consumption of blue cheese and fruity cheese is recorded. Consumption of foreign cheeses is increasing, too, due to the renewed attention of media to dishes and desserts which are typical of other countries, especially Italy and Spain. The value of British import of cheeses constitutes about 7% of total imports and they lmost all come from EU countries.

British market has reached a level of maturity and it offers consumers a wide choice of shelved cheese of local and European Union origin. The concentration of British supply chain has led to an equal reorganization of it dominated by few large groups. About a third of British milk production is intended for the production of cheese.

Bulk Cheese is aimed at a kind of sophisticated clientele who is familiar with the product and knows how to choose it from the vast panorama of international productions. In London and in the South of the United Kingdom there are indeed boutiques selling cheese. The local variety of Cheddar Cheese is more than 50% of the total value of sales (in pre-cut sizes, grated, sliced). The strengths of Cheddar Cheese are its competitive price, its local production, the wide range of consumption as main basis for snacks like salad dressing, pizza, pasta. Continental cheeses continue to gain space in supermarkets and British people experience more frequently different varieties from the many versions of Cheddar Cheese. Increasing imports are from France, Germany, Belgium and Italy while purchases of cheese are decreasing from the New World (Canada, Australia and New Zealand). Cheese focused on the needs of those who follow specific functional diets are getting popular. Soy Cheese, which is tofu-based, is out of its traditional position as an "ethnic-Asian" cheese and it is proposed for vegetarians and lactose intolerant people. Mass distribution also proposes several "light" brands of cheese with smaller presence of saturated fats, along with organic products. Italian presence, for example, is focused on mozzarella-cheese, parmesan, gorgonzola, mascarpone and ricotta cheese in a variety of formats and with different price ranges.

Given that Bright Business Consulting LLP does not carry distribution business, or proposes as a distributor or agent representative, it supports companies to access the British Market through consolidated and calcified synergies in the "PEE Project ".


In order to operate successfully, today and in the future, in the growing sector of food products in United Kingdom is absolutely advisable to have a local commercial presence also in order to access both to contributions and "Tax Incentives in United Kingdom – (UK)". To this purpose a British corporate body with appropriate accreditations is advisable, so Bright Business Consulting LLP is the ideal partner to achieve what has been mentioned.



Bright Business Consulting LLP
58/60 - Kensington Church Street


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