The UK agrifood sector is facing a period of significant disruption. From regulatory changes and geopolitical tensions to rising costs and climate challenges, businesses across the supply chain are under pressure. This article explores the current state of the sector, key risks and how companies can protect themselves using tools like the Coface Score and Credit Insurance.
The State of UK Agrifood
In our latest Risk Review, Coface assessed the agrifood sector in its Western Europe region, which includes the UK, as high risk for insolvency and non-payment.
Agrifood is a vital contributor to the UK economy, spanning agriculture, food manufacturing, processing, wholesalers and retail. However, the sector is grappling with a range of macroeconomic challenges including Brexit-related trade barriers, Ukraine supply disruptions, regulatory shifts, energy price inflation, and extreme weather events. These factors have created a volatile environment for producers, importers and exporters alike.
Adapting to the New Normal
In the meantime, exporters are finding ways to adapt. Many are investing in digital tools that streamline compliance and automate documentation. Others are exploring new markets outside the EU, diversifying their customer base to reduce reliance on European trade.
Trade bodies and industry groups are also stepping up, offering guidance, training, and lobbying for more immediate reforms. Collaboration across the sector will be key to navigating the next few years successfully.
The UK Agrifood picture in 2025
While headlines often highlight the challenges facing the UK agrifood sector, the reality is more layered. The sector continues to grapple with post-Brexit trade friction, rising input costs, and climate-related disruptions, all of which have contributed to squeezed margins and elevated insolvency rates.
Despite these pressures, there are signs of resilience. Some producers have adapted by investing in technology, exploring new markets, and responding to shifting consumer preferences. Government support in the form of innovation grants and plans to eliminate export license fees by 2027 also offer a glimmer of hope.
Coface’s analysis of sector performance and insolvency trends suggests that while the environment remains volatile, certain segments are better positioned to weather the storm.
Sector performance: Winners and Losers
✅ Winners
Premium and niche producers: Businesses offering high-quality, sustainably sourced, or locally produced goods have seen continued demand, particularly from export markets and health-conscious consumers.
Agile Producers: Business that adapt and cater to changing dietary preferences and environmental concerns - like more plant-based or high in protein alternatives. Although growth has slowed somewhat compared to previous years as some consumers have reverted back to basics due to cost-of-living crisis.
Technology-driven agribusinesses: companies investing in automation, precision farming and supply chain digitalisation are better positioned to manage costs and improve resilience.
❌ Losers
Small-scale exporters to the EU: Many SMEs have struggled with post-Brexit red tape, including costly export licenses and complex documentation, leading some to withdraw from EU markets altogether.
Labour-intensive producers: Sectors reliant on seasonal or manual labour, such as fruit and vegetable growers, continue to face acute staffing shortages and rising wage costs.
Energy- and input-intensive operations: Businesses heavily dependent on fertilisers, controlled environments, or long-distance logistics have been hit hardest by inflation and supply chain disruptions. The UK’s hottest summer on record intensified challenges for agrifood businesses, with supermarkets facing refrigeration failures and poultry farms struggling to maintain cooling systems. Adaptation will be essential to mitigate future risks
Risk Assessment
Agrifood businesses have been hit hard by rising input costs, regulatory complexity, and climate-related disruptions. The sector’s reliance on energy-intensive processes, seasonal labour, and global supply chains has made it particularly vulnerable to inflation and geopolitical shocks. Insolvency rates remain elevated, especially among SMEs that lack the resources to absorb these pressures.
Confidence across the sector is low, with many producers citing uncertainty around trade agreements, weather volatility, and input prices. This has led some to diversify away from traditional farming or delay investment decisions and while government support and innovation incentives offer some relief, the pace of change remains slow.
Coface continues to assess the UK agrifood sector as high risk. Businesses that embrace digital tools, diversify markets, and strengthen credit management practices, including use of the Coface Score, will be better positioned to navigate the challenges ahead. Credit insurance also remains a key tool for protecting against non-payment and supply chain disruption.
Get the Inside Track with Coface
For the latest insights into retail trade risks, Coface Business Information services provide in-depth financial, trading, payment, and market data, backed by expertise from our global network of 700 risk underwriters and analysts.
Whether you need to assess potential clients, enhance your risk management strategy, or explore new markets, we help you trade smarter. Our credit insurance also offers protection against bad debt, ensuring you can operate with confidence.
For more information on how Coface can support your business, contact us today.
