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International Resources: Global Market Profile: United Kingdom

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about the United Kingdom from Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Entering the United Kingdom’s Market

The United Kingdom is comprised of the countries of England, Northern Ireland, Scotland, and Wales. Citizens of the United Kingdom often do not consider themselves European. Also when conducting business in the United Kingdom or with a person/company from the United Kingdom, remember that the terms British and English are not synonymous. Neither term refers to Northern Ireland, and the term English only refers to natives of England. People from the United Kingdom are very proud of their history. Even though both the United Kingdom and the United States have English as their native language, the Queen’s English and American English are very different.

Working hours are from 9:00 a.m. until 5:00 p.m., but it is common for businesspersons to remain at work later. Avoid making meetings between Christmas and New Years, because businesses shut down. It is best to avoid July and August when those with children normally take their annual vacation. Easter is also popular for traveling.

At business meetings, there is no need for small talk or ice breakers. This allows for business to begin without delay. The most common form of communication is letters and faxes rather than phone calls. After receiving a fax or letter, you should send a response informing the sender you received the document.

Gift giving is not a common business practice. If invited to a counterpart’s home, it is common to bring flowers, wine, or chocolates. If you bring wine, do not be offended if it is added to the wine cellar. It might mean your counterpart has already opened or chilled the wine best suited for the meal. If bringing flowers, do not bring red roses, white lilies or chrysanthemums.

Around 90% of fresh fruits are imported into the United Kingdom yearly, while the country remains mostly self-sufficient in traditional vegetables. 60% of fresh produce sales are derived from vegetable sales. Organic is becoming a big market in the United Kingdom. Organic products are normally imported from outside the European Union.

The United Kingdom is a net importer of food. Most produce imports come from Spain and the Netherlands. European member states and the United States are the major food exporters to the United Kingdom.

The bulk of the fresh produce that the United Kingdom does export goes to other European Union member states. Potatoes are the dominate vegetable, while apples are the chief fruit commodity.

Currently agriculture counts for 1% of the United Kingdom’s GDP and 1.4% of the country’s labor.

Doing Business in the United Kingdom

First impressions are important. To help bridge the gaps, we suggest that you:

• When addressing your counterpart, remember that titles are important, so if known, they should be used accompanying the person’s last name. Wait for your counterpart to make the relationship more familiar.
• The most common form of greeting is a hand shake between both men and women.
• Try to use proper manners. People in the UK find Americans too casual. Manners are very important. Try not to speak loudly or act disruptively.
• Personal space is valued. Also, touching is generally avoided.
• Dress is conservative: men wear dark colored suits and women should dress conservatively as well. Men should try to avoid ties with stripes and wear laced shoes, not loafers.
• Make appointments as far in advance as practical. Best times for meetings are around 11:00am or 4:00pm.
• Be on time for all meetings; business people in the UK are very punctual. Arriving early is appreciated.
• Carry plenty of business cards. They are normally exchanged at the end of a meeting.
• Where possible, provide written materials and/or copies of your presentations.
• During a verbal presentation, it may be advisable to repeat key points for emphasis and provide a copy to your associates.
• Eye contact is seldom kept during conversations, and staring at a person should be avoided. However, when first meeting, you should make eye contact.
• If your counterpart (or you) taps on their nose, it signals the subject is to remain confidential.
• During a meeting, sitting with your arms folded signals that you are bored and uninterested.
• The decision making process is slow. Most decisions are made at the top, so you need to be patient.
• Win-Win approaches are most favorable, and many people in the United Kingdom try to achieve this outcome during negotiations.
• Often an oral agreement is considered binding. It will most likely be followed by a written confirmation. However, major agreements will need legal procedures.
• Business meals are often held at pubs over light lunch and a pint of ale.
• Business is not discussed at social events and gatherings.
• When negotiating, it is better to send higher officials for face to face negotiations.
• In the UK, business is hierarchical, and most decisions are made at the top.
• When invited to a counterpart’s home, it is advisable to arrive 10 minutes late.
• Avoid making the ‘V for Victory’ sign. It is considered offensive. 
• People in the United Kingdom frown upon others who cut in line. If there is a line, which is commonly called a queue, you should wait your turn.
• The number 13 is considered extremely unlucky.

Consumer Preferences, Tastes, and Traditions

These ideas may help you focus your product approach. Attention to catering to consumer preferences is a key to success in the United Kingdom’s produce market.  

• United Kingdom has a sophisticated market that seems to mirror trends in the United States market, due to the high interest of traveling to the U.S.
• Innovated products are widely enjoyed.
• People in the United Kingdom look for name brands, because there is a good brand image in the United Kingdom.
• Consumers look for healthy, specialty, ethnic, and/or organic foods.
• People in the United Kingdom do have different taste buds so the desire for popcorn, peanut butter, and U.S. style chocolate is not the same.
• British consumers do not prefer Genetically Modified Organisms, and there are a lot of GMO-Free areas in the UK.

Export Business Reminders

• Before coming to the United Kingdom, use the many sources of information, for example, the Foreign Agricultural Service, state agricultural offices, and state/regional trade organizations in the United States.
• Build at least a minimum team within your company to help on the market in the United Kingdom.
• Use metric terms.
• When giving quotations to a United Kingdom importer, note that "Free on Board" (FOB) implies FOB ship not backdoor of U.S. facility (i.e. include freight costs to U.S. exit port/airport). Other common terms for quotation include "Delivered U.K. port" and "Door to Door with or without duty paid".
• Ensure that all sales documentation is correct.
• Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance.
• Respond to such requests with diligence and in a timely fashion.
• Use letters of credit to reduce risk.
• Hedge export values with your U.S. bank if you are concerned about exchange rate risk.

Food Standards and Regulations

The United Kingdom follows European Union policies regarding labeling and ingredient requirements. A detailed report that specifically addresses labeling and ingredient requirements is available. The report is entitled: “The UK: Food and Agricultural Import Regulations & Standards Report” (FAIRS) and can be obtained here or you can receive a very brief outline here.

The Food Standards Agency, which is an independent Government department set up by an Act of Parliament in 2000 to protect the public's health and consumer interests in relation to food, addresses everything from labeling to food hygiene. Visit the USDA’s Exporter's Guide to review everything from food laws to useful contacts. 

Advantages/Disadvantages to Doing Business in the United Kingdom

Information: Import/Export

Agricultural imports from all countries (millions): $67,365, U.S. market share: 22%.

Consumer food imports from all countries (millions): $22,386, U.S. market share: 19%.

In the United Kingdom, agriculture represents on 1% of the total GDP when measured in terms of gross added value.

The UK is a net importer of food, with a trade deficit of over $20 billion in 2004. The United Kingdom; however, only met 60% of the country’s food needs. The remaining 40% is met through imports. The United States exported $90 million in tree nuts, $86 million in fresh fruit, and $25 million in fresh vegetables to the United Kingdom in 2005.

Visit here for important importer information.

U.S. Exports to the United Kingdom

*Calendar Year and Year-to-Date Comparison (In Thousands of Dollars)

U.S. Imports from the United Kingdom

*Calendar Year and Year-to-Date Comparison (In Thousands of Dollars)

Trade Agreements

The United Kingdom is a member of the European Union. Since becoming a member state, the United Kingdom has joined the European Union’ Common Agricultural Policy, which oversees all agriculture.

European Union agricultural and trade policies are major determinants of agricultural production and trade. The European Union’s Common Agricultural Policy is primarily a domestically oriented farm policy that has shaped all European Union member state’s agriculture since 1962. The Common Agricultural Policy states that there will be product preference in the internal market of the European Union over foreign imports through common customs tariffs.

Since adoption of the Uruguay Round Agreement on Agriculture (URAA), the European Union’s commitments have increasingly affected its agricultural trade and have also strongly influenced the member state’s domestic agricultural policy.

If you are shipping any goods to Europe, you should obtain a written customs duty ruling, known as Binding Tariff Information (BTI). Getting a BTI is free and will prevent any conflict over customs or excise duty. A BTI is valid for six years.

HM Customs and Excise
Tariff Classification
2nd Floor South West
Alexander House
21 Victoria Avenue
Southend-on-Sea
Essex SS99 1AA
Tel: +44 (0)1702 366077

Generally, there is no Value Added Tax (VAT) on fresh produce.

United Kingdom Annual Exporter Guide (2006)

http://www.fas.usda.gov/gainfiles/200610/146249256.pdf

Information Regarding:
a) summary of consumer attitudes available on page 6 of the guide
b) market sector and trends available pages 7-11 of the guide
c) valuable contact information available on page 13 of the guide

United Kingdom Related Links and Resources

Currency - the currency of the United Kingdom is the pound sterling. Use the free currency converter to compare to dollars, Euros, etc.

Weather - visit Yahoo!'s up to date Weather for the United Kingdom.

News - check out all the latest Google news on the United Kingdom.

Intercultural Know-How - use the Intercultural Business Communication tool for tips on doing business in the United Kingdom.

Dialing Code - the international dialing code for the United Kingdom is +44.

Time – United Kingdom is +1 hours GMT. Find out the current time.

History - read about the long and rich history of the United Kingdom.

Government Resources

• United Kingdom’s Department of Environment Food and Rural Activities: http://www.defra.gov.uk/
• US Embassy and Consulates in the United Kingdom: http://london.usembassy.gov/ukaddres.html http://usembassy.state.gov/
• European Food Safety Authority is the government department in charge of standards, regulations, quality, and health and consumer protection body for all European Union member states. Many importers will expect to see evidence of in-field Quality Assurance (QA) systems and integrated pest management. Industry standards are distinct from the legal regulations, which suppliers must comply with.
• The main industry standards are:
  • Hazard Analysis Critical Control Point (HACCP)
  • EUREPGAP
  • Produce marketing standards
• Background Notes on the United Kingdom.