Confidence in the UK food and drink sector is declining, with Brexit a major concern, a survey by advisory firm BDO has found.

The BDO Food and Drink Survey 2018, published today (21 May), reveals while 60% of respondents say they are positive or very positive about their prospects for the future, 42% think that Brexit is the biggest threat to their business.

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Only 24% of respondents were confident the UK government will negotiate a favourable post-Brexit environment for the industry and 55% think Brexit will have a negative impact on access to labour and skills.

BDO said: “A quick glance at this year’s BDO Food and Drink Survey could be misleading. With 60% of respondents saying they are very or quite positive about future prospects, and only 6% predicting a negative outlook, there seems little for the industry to worry about.

“But a closer look at the data reveals this level of optimism has been eroding over the last three years. In 2016, 79% of respondents were optimistic about the future. That level dropped to 73% in our last survey and is further down this year. Yes, people are confident. But increasingly less so.”

BDO points to Brexit as the largest threat to future prosperity in the eyes of survey respondents.

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“Without doubt, there is one clear challenge ahead: the UK’s separation from the EU,” it said.

“The food and drink industry is heavily reliant on EU labour, with one in three workers coming from the Union. With Brexit being largely about applying restrictions on cross-border movement, the upcoming disconnection from the continent is seen as a major threat to business operations.

“A mere 2% of respondents predicted Brexit would have a positive effect on their business, and 31% expected to see negative impacts on trading performance within a year. Another 36% thought trading pressures would last over the medium and long term.”

The survey was based on interviews with more than 60 food and drink sector executives, at the chief executive officer, managing director and finance director levels.