Food inflation helps Scotland's food and drink sector grow turnover to record £19bn

Food price inflation has “undoubtedly” helped Scotland’s food and drink sector grow turnover to a record value of £19bn, the head of an industry body has said.

With some 17,000 food and drink businesses, the sector is Scotland’s third largest industry by value, contributing a record £7bn in Gross Value Add (GVA) to the economy.

The figures, published by the Scottish Government, represent the value of the country’s food and drink sector in 2023 – with a two-year time lag needed to collate, verify and analyse the information.

Despite the record value, Iain Baxter, chief executive of industry body Scotland Food and Drink, said the sector is “cautiously optimistic rather than celebratory”.

The increase in the value of the sector is linked to growth in both export and domestic sales, as well as higher market prices because of inflationary pressures and rising energy costs.

Speaking at a reception at Holyrood on Tuesday, Mr Baxter said: “Food price inflation has undoubtedly played a part in the growth of our sector’s value.”

However he said producers are “under significant cost pressures arising from stubbornly high input costs”.

He added the record value for the sector had been achieved during “some incredibly challenging times, including the fallout from Brexit, the war in Ukraine, the Middle East crisis and the global pandemic”.

Mr Baxter said: “It shows how the power of perseverance, ambition, partnership and continued investment in one of Scotland’s most valuable and resilient industries can ensure sustainable growth.

“Recent times also remind us of what is at stake, with global competition intensifying, increasing costs and the challenges of sustainability, availability of labour and workforce development needs continuing to grow, and these figures show that the Scottish food and drink industry has remined resilient in recent years despite these challenges.

“I’m proud of the way our businesses have met challenge after challenge and ensured that food and drink remains one of Scotland’s greatest success stories.”