News story

UK barley deal worth £100 million to boost Chinese beer industry

Barley producers set to benefit from landmark agreement to export around 750,000 tonnes of the grain to China

British barley is booming in China as growing demand for beers and ales leads to a trade deal worth up to £100 million for UK farmers, Environment Secretary Elizabeth Truss announced today.

Barley producers will reap the benefits of this new landmark trade deal which could lead to around 750,000 tonnes of our top quality British grain being exported to Chinese breweries over the next five years.

The deal has been struck this week as Elizabeth Truss leads a delegation of 80 UK food and drink businesses to China—the largest ever food and drink trade mission of its kind—to turbocharge Britain’s exports to the world’s largest market.

Not only are the Chinese using our barley to produce beer, they also have a growing thirst for the UK-produced beverage, including Fullers and Meantime, with £15 million worth of British beer exported to the country last year — a 186% increase since 2013. Up-and-coming microbreweries, like St Peter’s Brewery in Suffolk and Ilkley Brewery in Yorkshire, have also recently stated exporting there.

Welcoming the new agreement during a visit to ‘The Brew in Shanghai’—one of a number of popular new microbreweries opening in cities across China—Environment Secretary Elizabeth Truss said:

British beer has a worldwide reputation and we’ve had huge successes selling more than a billion pints of our quality lager and stout around the world, building a stronger economy for the UK.

Ilkley Brewery in Yorkshire is an excellent example of a growing British company tapping into this global market. I want to make sure British businesses seize the vast opportunities available in China, the world’s biggest food and drink market.

Barley, which may also be used for animal feed in China, is the latest in a long line of new markets negotiated by the UK government, with more than 600 opened since 2010. While in China, Elizabeth Truss will lead negotiations to pave the way for further deals.

Jane King, Chief Executive of the Agriculture and Horticulture Development Board (AHDB), who worked with Defra to secure the deal said:

This deal represents a vast amount of work by AHDB and its partners and a huge opportunity for farmers in the UK. Our staff have worked very hard on levy payers’ behalf to get this protocol off the ground, and we look forward to seeing companies making the most of this new market access.

China is already the world’s biggest beer drinking country, guzzling a whopping 54 billion litres every year. China now outdrinks the US (24 billion litres), Brazil (14 billion litres) and Russia and Germany (9 billion litres). It is estimated that by 2017 China will outdo the US as the world’s largest market for beer.

As well as premium brands such as Tsingtao, Yanjing, Harbin and Laoshan, demand for craft ales and beers has rocketed. In Shanghai alone, the number of microbreweries has doubled between 2010 and 2012.

The trade visit coincides with the launch of London’s first heritage ‘gin trail’ for tourists, capitalising on the growing demand for this quintessentially English spirit across the world, including in China where we exported 643,000 litres in 2014. Highlights from the trail will see tourists invited to enjoy a G&T at St James’ Duke’s Hotel - the inspiration for Ian Fleming’s famous line ‘shaken not stirred’; see the copper stills in operation at artisanal Sipsmith in Chiswick or sample one of 300 gins at Soho’s Graphic Bar – one of the UK’s largest gin collections.

Linking with fast-growing economies like China is a vital part of the government’s long-term plan, helping UK companies to benefit from China’s vast and varied markets. With a population of 1.3 billion, China is now the world’s largest food and drink market. Over £280 million worth of British food and drink was exported in 2014, up from £136 million just two years earlier.

Food and drink is one of the UK’s big export success stories, totalling nearly £19 billion in 2014, a rise of £1.2 billion since 2010. These exports support an industry that, from farm to fork, contributes £103 billion to the UK economy—more than cars and aerospace combined—and employs one in eight people.