Associate and FDEA Member, Ella Paskett explores some of the key opportunities & challenges facing exports in 2025.
Navigating new technology, building stable supply & distribution chains and keeping up to date with new regulations will always be challenging in a fast-developing market. What’s more, UK exporters have been met with continuing challenges of labour shortages, rising energy prices, inflationary wage pressure and now new challenges such as fresh US tariffs. Regulations can often seem never-ending. We believe that the law shouldn’t be a barrier to business objectives but rather act as a means through which you can seize opportunities and bring about business transformation; be that growth, performance or risk management. We’re passionate about the food and drink industry and want to help our clients get their fantastic products out into the world.
Opportunities
Collaborations Whether it’s working with international retailers & distributors or local partners, building long-term relationships can increase brand recognition, and boost market access. Considering relationships from a strategic angle can help exporters navigate local regulations and identify changing overseas trends and market developments. Taking legal advice at an early stage is crucial for longevity and ensuring that relationships are structured effectively, risks are mitigated, and all parties are protected. We can advise you on the most appropriate legal structure and help you avoid future complications whilst enabling you to remain flexible so that you are not restricted from engaging in other opportunities.
E-commerce
As e-commerce platforms become increasingly accessible, UK exporters can use this technology to their advantage. Leveraging these platforms and establishing a strong online presence can help facilitate new business partnerships, and direct-to-consumer sales, build brand recognition and increase international market access. Asking for legal support when integrating terms and conditions into an e-commerce platform can help ensure both you and your customers are protected as boilerplate terms may not go far enough to protect your particular interests. It is important that your terms are able to carry out the role you intend for them and avoid future disputes that could be financially damaging.
Artificial Intelligence
With the help of continuously developing and more affordable AI software such as predictive analytics, real-time data monitoring, and automated warehousing solutions, exporters can transform their operations. AI technologies can offer opportunities to reach new markets and optimise operations. However, AI comes with its own risks and costs, and food and drink exporters must think beyond just adhering to trade laws. We can help you analyse how the use of AI Software impacts your business (for example GDPR compliance) and keep you informed about the latest updates to AI regulations as they develop and support you when negotiating contracts with software providers.
Sustainability
Increasingly aware consumers are prioritising high-quality, sustainable products. Exporters who invest in sustainable sourcing, environmentally friendly packaging, and ethical production practices may find favour with consumers who prioritise these values and set them up for success with upcoming regulations. Environmental regulations are continuously developing, and keeping on top of these will benefit both the environment and boost profitability and competitiveness in the global market. New proposals under the Packaging and Packaging Waste Directive (which governs EU packaging laws) will affect food and drink exports and require all packaging placed on the EU market to meet greater recycled content targets in efforts to reduce waste. Businesses that start planning early can ensure a smoother transition to the new system without business interruption.
Changing Global Markets
The UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in December 2024 opened the gates to 11 Indo-Pacific markets, providing tariff-free access, including Australia, Japan and Canada for UK food and drink exports. Furthermore, opportunities are emerging in economies such as India and Mexico, which are set to benefit UK exporters with an increasing demand for organic, health-conscious and ready-to-eat packaged foods.
Challenges
Navigating new technology, building stable supply and distribution chains and keeping up to date with new tariffs and regulations are always going to be challenging in a fast-developing market. Regulation can sometimes seem never-ending, and our job is to help our clients navigate upcoming regulatory changes.
One such regulatory change is the EU Deforestation Regulation which is likely to present a key challenge for many food and drink exporters and affiliated businesses. The obligations imposed by this regulation will apply from 30 December 2024 (or 30 June 2025 for small and medium-sized enterprises) and require companies trading in commodities such as cattle, cocoa, coffee, palm oil, rubber, soya and wood, as well as products derived from these commodities, to conduct extensive due diligence on the value chain to ensure the goods do not result from recent deforestation, forest degradation or breaches of local environmental and social laws.
With potential fines for non-compliance of up to 4% of a company’s EU turnover, companies planning on trading such products on the EU market will have to be able to demonstrate that they:
• originate from land not obtained through the conversion of natural forests or other natural ecosystems (no matter the cause of this deforestation);
• are produced in line with the relevant legislation of the country of production (including, but not limited to, laws on human rights, anti-bribery/corruption, land use, labour rights and tax); and
• are covered by a due diligence statement.
Although the primary obligations of the EU Deforestation Regulation will only apply from 30 December 2024, exporters who trade in the highlighted areas should consider looking at their IT systems, updating people in their organisation of the obligations to encourage internal engagement and start preparing to audit their supply chain to ensure the traceability of relevant commodities. They will need to be confident that any products entering the EU market from the end of the year are not from land that has been deforested or subject to forest degradation since 31 December 2020.
We appreciate that every business is different and our experience working with the different food and drink producers can help us tailor our advice. We aim to provide strategic and valuable advice that meets your commercial objectives. We’re passionate about the food and drink industry and want to help our clients get their fantastic products out into the world. We believe that the law shouldn’t be a barrier to these business objectives and we’re here to help our clients navigate complex legal issues, whether that be regulatory frameworks, contractual relationships or corporate governance issues.
Business value derives from setting up relationships correctly, proper governance and protecting your assets. Whether that’s protecting and licensing your Intellectual Property, advising you on digital expansion and implementation of technology or helping you ensure you have the right documents in place, our expert team will partner with you to ensure you are fully utilising the value within your business.