Vietnam emerging as market for British agriculture companies

May 17, 2024 | 07:48
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Vietnam presents a great opportunity for UK businesses to boost their exports of agriculture, food, and drink products.
Vietnam emerging as market for British agriculture companies

According to the Connecting the UK and Vietnam in Agriculture, Food and Drink report by Edelman Global Advisory (EGA) and sponsored by the British Embassy Hanoi, the Unitted Kingdom is Vietnam’s third-largest trading partner in Europe, with bilateral food and drink exports growing significantly in recent years.

UK food and drink exports to Vietnam jumped 97 per cent in 2020-2023 to reach $154 million. Export of Vietnamese counterparts to the UK followed the same trend, with an increase of over 21 per cent to $630 million during the same period.

The top three export products of the UK are Scotch whisky, seafood and confectionary, while imports from Vietnam to the UK primarily comprise tropical fruits, coffee, and nuts.

The report also pointed out that the UK - Vietnam Free Trade Agreement has brought immense opportunities for the agriculture, and food and drink sectors. The majority of F&B product categories now benefit from a phased reduction and eventual elimination of tariff rates by 2031.

Building upon this, the UK's full accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), scheduled to take place in 2024, will pave the way for even more exciting agri-food trade opportunities.

For Vietnam the benefits are already clear. Exports of agri-forestry-fishery exports to CPTPP member countries increased 32 per cent in just three years from $2.2 billion in 2019 to $2.9 billion in 2022.

"The agri-trade relationship between the UK and Vietnam continues to flourish. British consumers can already enjoy a wealth of Vietnamese produce, which feature abundantly throughout British supermarkets and the rapidly expanding Vietnamese restaurant scene in the UK. In the opposite direction, UK produce is enjoyed by Vietnamese consumers every day, based on its reputation for high-quality, and produced to world-leading standards of food safety, human health and animal welfare," said Iain Frew, UK Ambassador to Vietnam.

In recent years, Vietnam has undergone a profound transformation in its culinary and shopping sectors. This is being driven by robust economic growth, rapid urbanisation, evolving consumer preferences, lifestyle changes, and increased exposure to global cuisines.

Vietnamese consumers, especially those living in cities, are becoming more selective, seeking convenience, quality, and health-conscious options in their F&B choices. Higher demand is also observed among the emerging middle class for organic foods, eco-friendly options, and imported products, even at a higher price point.

A survey of 1,000 people in Hanoi and Ho Chi Minh City, conducted by EGA, reveals that purchasing decisions track consumers’ appreciation for imported products adhering to higher food safety standards and offering clearer nutrition instructions than domestic options.

British F&B products, renowned for their stringent quality standards and nutritional value, resonate well with Vietnamese consumers.

There exists substantial preference for British F&B exports to Vietnam, particularly in segments like premium chocolates, speciality teas, craft beers, and healthy snacks.

The survey by EGA showed that British food products are most commonly associated with beverages, dairy and confectionery. It suggests that more efforts need to be made to bring the UK's signature "from farm to table" products closer to Vietnamese consumers, such as seafood, meat, and poultry.

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By Vy Bui

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