Food for thought: The challenges facing Scottish exporters in the year ahead

As Scotland last week prepared to celebrate the national bard’s birthday, diplomats from across the globe were invited to a Whitehall reception to sample some of the best produce the country has to offer. Well-known names such as Baxters and Tunnock’s were joined by smaller artisanal concerns, such as those producing honey or sea buckthorn juice. Hosted by Scottish Secretary Ian Murray, the event was an opportunity to promote ‘Brand Scotland’ in an increasingly competitive global market.

Just 24 hours earlier, the world had looked on as President Donald Trump vowed during his inauguration spech to make good on his pledge to introduce trade tariffs, promising to set up an “External Revenue Service” to collect money from “foreign sources”. While the details remain unclear, the introduction of tariffs could hit Scotland’s food and drink producers particularly hard in what is their largest export market. In 2021, the sector’s overall exports were valued at an estimated £6.1bn – roughly a fifth of all Scotland’s international exports. 

So much of Scotland’s international image is predicated on its produce – from the single malts lining the shelves of upmarket bars from Shanghai to San Francisco to the seafood being served in the finest Parisian brasseries. Unsurprisingly, that global reach makes the food and drink sector a major employer at home, accounting for around five per cent of all employment in Scotland as a whole and more than 10 per cent in areas such as Aberdeenshire and the Highlands. 

Yet despite the obvious success stories, 2025 already looked set to be a challenging year for much of the industry – even before Trump signalled his America First trade tariffs. Figures published towards the end of last year showed the sector’s output falling alongside the number of jobs being created. Indeed, one of the few numbers actually increasing was that of companies going to the wall. Producers also face the triple threat of sluggish economic growth in the wider economy, the impact of climate change and the legacy of Brexit which has made it harder to fill the jobs that do exist. 

“We’re not attracting enough people of Scottish origin into these jobs,” says Amanda Brown, programme director at industry body Scotland Food and Drink. “Looking at visa and immigration policies is a really important part of what we need to continue talking to government about. But there’s also that bit about attracting people to Scotland by providing skilled and well-paid jobs.”  

So concerned was the Scottish Government at labour shortages in the sector that rural affairs secretary Mairi Gougeon wrote to her UK counterpart last year ahead of the general election, warning that the loss of EU nationals after Brexit had led to “significant and immediate gaps in labour that cannot be quickly or easily replaced”. While intergovernmental relations have clearly improved since the election of the Labour government in July, there’s nothing to indicate the problem – which Gougeon called the “scourge” of the food and drink industry – has significantly improved. 

“A huge part of the industry is agriculture which is highly seasonal,” says Brown. “But some of it is also in roles needed 365 days a year, having highly skilled people in highly skilled jobs that we have in many of the sectors, whether that be in the red meat sector in butchery and processing or around automation and engineering in general.”

In 2023, Scotland’s food and drink industry launched a 10-year strategy, Sustaining Scotland – Supplying the World, with the hope of increasing turnover in the sector by 25 per cent to £20bn by 2028. The strategy aims to support the sector to grow faster than similarly sized competitors, such as Ireland and Norway, while tackling ongoing challenges like labour shortages and the impact of climate change. 

How the industry responds to both the impact of the climate crisis and the demands placed on it as Scotland attempts to reach net zero emissions by 2045 is now a major concern. Last year’s annual NFU Scotland harvest survey found many producers complaining of the toughest growing season and harvest in 30 years due to a wet autumn and winter followed by a late spring. The farmers’ union said there had been “huge variations in yield and quality” of crops such as barley, wheat and oats across the country.

But while warming temperatures have brought difficulties for Scottish producers, there are opportunities too. With climate change wreaking havoc on harvests in the south of Europe, the cost of olive oil has surged, with a 1l bottle currently costing up to £15 in UK supermarkets. That has seen consumers turn to alternatives such as rapeseed, which is grown across Scotland, its golden flowers highly visible across the landscape. Cheaper than the Mediterranean alternative, rapeseed oil also has around half the level of saturated fat. 

Simon McKeating, net zero programme manager at the Food and Drink Federation (FDF) Scotland, says as well as the need to reduce overall emissions there will also be opportunities presented by adapting to the impact of a warming climate. 

“I spoke to a producer [of rapeseed oil] recently who was concerned about pricing when they started out because of the premium they were going to have to charge,” he says. “But events kind of overtook them and compared to olive oil, it now looks quite reasonably priced.

“Adaptation is definitely an opportunity for Scotland. For example, there are many vegetables produced [in the south of England] which require irrigation – when the water literally dries up down south, we’re still going to have a significant amount of water available in Scotland. It might be that areas which weren’t previously considered suitable due to access and topography might now be considered. The flipside of that is that we have had our own water shortages in Scotland, so it’s a bit of a double-edged sword.”

Image: Alamy

One recent climate-related intervention, the addition of methane-reducing Bovaer in cow feed, provides a salutary lesson for food and drinks producers, however. When Arla Foods, a multinational which owns the UK’s largest dairy cooperative, announced that some of its farms would test the additive, there was a huge online backlash, with some customers vowing to boycott the company’s products and others filming themselves pouring milk down the drain. The campaign was driven by misinformation on social media, including wild conspiracy theories about a Bill Gates-backed plan to depopulate the earth. That was despite Bovaer, which is produced at a plant in Dalry, North Ayrshire, being approved by regulators, with the Food Standards Agency saying the additive had undergone rigorous safety assessments.

“With the benefit of hindsight, it’s probably going to become one of those PR lesson examples,” says McKeating. “I don’t think anybody appreciated the level of backlash there would be based on, frankly, misinformation. The social media debates we now have often seem to gather momentum based on very little [accurate] information.” 

There have been environmental concerns too about another of Scotland’s key food exports – salmon. A report published earlier this month by the Scottish Parliament’s rural affairs committee found the salmon farming sector had made “slow progress” on improving its environmental impact, although it stopped short of calling for a ban on expansion. Warmer waters caused by climate change led to mass die-offs of fish in 2022 and 2023, but MSPs said that preventing such events was “not currently within the operational capability of the industry”. A previous report had raised concerns about welfare standards and pollution.

Following publication of the latest report, the Scottish Greens called for a “pause” on new salmon farms, while the Green Britain Foundation, set up by Dale Vince, owner of the energy firm Ecotricity, accused the Holyrood committee of an “abdication of responsibility”, saying the report’s recommendations fell “woefully short” of addressing the environmental damage caused by the sector. Chris Packham, the TV presenter and campaigner, said industries like Scottish salmon farming were “actively driving” both “climate breakdown and biodiversity loss”. 

According to the Scottish Government, aquaculture generated £337m in 2022 – the equivalent of 0.2 per cent of the overall Scottish economy – with 96 per cent of that value coming from Atlantic salmon. The sector also employs 2,200 people, but industry body Salmond Scotland says the industry sustains around 10,000 jobs in the wider economy.

Salmon Scotland’s chief executive Tavish Scott, a former leader of the Scottish Liberal Democrats, said the farms have “world-leading” welfare and environmental standards, noting that most of the report’s recommendations were for the Scottish Government, not the industry itself. 

Image: Alamy

There could be further difficulties for the salmon industry if Trump follows through on his threat to introduce tariffs. While the EU is the product’s biggest export market, North America accounted for roughly a quarter of all salmon exports in 2024, according to the industry. Overall, the United States receives 16 per cent of Scotland’s total exports, with the export value of Scotch whisky worth £978m in 2023. When Trump introduced tariffs during his first term – in retaliation for EU state support for Airbus – it was estimated to have cost the industry £500m in two years in lost exports. 

“Absolutely tariffs are a concern,” says Brown. “But the partner organisations we work with and the businesses individually are aware of the risks, and we will be looking collectively at where other opportunities might exist should those tariffs make trading with North America more difficult than it is at the moment.”