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Research: Chinese food suppliers eyeing British supermarkets

"The Grocer soon going to publish our next trade report (for Q3). We’re just looking at the data for the first couple of months of that. And from what we can see so far, we’re still seeing that persistent increase to the UK.”


The top five product categories include fish, poultry, vegetables, confectionery and prepared foods. And some of the biggest increases are soft drinks, spirits, protein concentrates, animal fats and oils.


So, why is it happening? What signs are there that it will ramp up further? What else could Chinese suppliers bring to the UK, and who are their target retailers?


The impact of tariffs

Efforts to grow exports to the UK have stepped up in Luohe, a city in China’s Henan province that’s home to more than 7,000 food manufacturers. A state-funded enterprise founded in December last year aims to make Luohe China’s first‘food capital’.


Called the Central-Southern Henan Digital Industry- Finance Platform, it says it aims to “leapfrog growth in Luohe’s food exports and cultivate internationally influential food brands”, with the UK a key target.


Previously, many suppliers there would have struggled to deal with UK supermarket payment terms, because “they normally expect payment before they ship”, says Marc Houppermans, executive partner at Discount Retail Consulting. “But the government- funded platform is financing the risk for them,” by paying them up front. “They’re so eager for expansion, they’re willing to do everything,” adds Houppermans.



Online, the platform integrates more than 750,000 SKUs with e-commerce giants JD.com, Alibaba and Yitong. Offline, it launched the ‘China Food Capital Luohe’s Brand Pavilion’ in May, showcasing more than 660 food brands for export. The platform tells The Grocer its “tenants have expressed clear intent to expand into European markets, including the UK. “Following the US imposition of 10%-25% tariffs on certain food products, local food enterprises have seen export costs rise by 10%-15%. To mitigate, expanding into Europe is essential. As a gateway to Europe, the UK provides access to EU and Irish markets.”


It says it “can leverage Luohe’s Brand Pavilion’s network of over 660 renowned food brands and more than 8,000 individual products to flexibly match supply volumes with UK market demand,” and its “long- term strategy centres on the UK as a gateway to broader European expansion”.


This is thanks to the Sanitary and Phytosanitary(SPS) deal – a broad food safety agreement between the UK and EU – due to be implemented by 2027.


“There’s potential opportunity for those Chinese companies,” says Hyde. “At the moment, they have to follow two regulatory landscapes, one in the UK and one in the EU. In the future, the UK is committed to aligning to EU laws, so that will allow them to make one product and follow one set of rules.


“The UK and Europe will be one and the same again from a food safety perspective. Having one set of rules will be quite beneficial for those Chinese companies.” The Luohe platform says it will prioritise brands that have already achieved international certification and compliance with UK or EU food standards. Examples include Wuliang’s no-added-sugar mochi slices, Shuanghui’s low-salt meat products – which it says are “aligned with UK low-salt dietary trends” – and functional oatmeal developed by Zhongyuan Food Laboratory, “meeting UK health food demands”. It says it sees strong demand in the UK for additive-free and distinctive Chinese foods, such as sauces and prepared meals, with its research indicating a 25% market gap in these categories. It is also eyeing better returns, noting “premium pricing in the UK food market exceeds domestic and southeast Asian levels, with select products offering 15%-20% higher profit margins”.


The platform has even named its target retailers. It will “focus on three client categories: large supermarket chains (Tesco, Sainsbury’s), primarily promoting snacks and condiments; premium supermarkets (Waitrose), primarily promoting functional foods and organic products; and Chinese community supermarkets, primarily promoting Chinese-style prepared meals and specialty sauces”.

 

Specialist supermarkets are one thing, but Houppermans is sceptical of the prospect of Chinese food brands making a big splash in the likes of Tesco, Sainsbury’s or Waitrose.


“Chinese specialist stores are their first market, but this market is not very big,” says Houppermans. “And if you put these Chinese brands in UK supermarkets at the moment they won’t sell, because the trust isn’t there. They have no brands that we know.”

 

Consumers might be open to the new regional flavours, but “not with Chinese labelling and a Chinese brand on it”, Houppermans adds. “Only with a Tesco brand or whatever. So, the opportunity is: ‘Can you develop private label for UK supermarkets?’”

 

For UK supermarkets, the appeal would be lower costs, he says: “It would be cheaper. The platform talks about premium pricing, but it must be read as premium pricing compared with China. The supplier could have higher margins while the retailer gets lower prices than buying from European suppliers, even with the necessary logistical costs.”

 

That being so, Houppermans sees a potential market in the discounters, notably Aldi. After all, Aldi supermarkets in China already sell “Aldi-branded private label goods which are all produced by those factories [in Luohe]”, he says. “Costco is the same. I can imagine now the next step would be to convince Aldi that they also start importing to maybe Australia and the UK.”

 

Doors already open

The FDF’s Hyde says Chinese-manufactured products already find their way on to UK supermarket shelves: “As I understand it, some products, both branded and supermarket own label, are already manufactured in China. It’s the things you would expect, such as noodles, rather than ones that are domestically produced in large quantities. So it would not be a new occurrence, but it could happen in greater quantity in the future.”

 

He says FDF members report being reliant on China for specialist products such as green tea and pumpkins, but the ambitions expressed from China now span “much broader categories and everyday food and drinks”. The Grocer approached Tesco, Sainsbury’s, Waitrose and Aldi, none of which responded to enquiries about Chinese imports.

 

The Luohe platform acknowledges it has barriers to overcome, including “lack of brand recognition”. It plans to “enhance regional public brand awareness” through Google Ads and UK food exhibitions.

 

There are also “potential regulatory barriers” in UK food safety regulations, including labelling requirements, allergen warnings, Defra certification for meat products and BRCGS certification for packaging. The China-based Laboratory and Fangyuan Certification Group is assisting enterprises in achieving compliance. Some categories will be ruled out by regulatory hurdles, says Hyde. “They can’t export products with dairy in them into the UK, including dairy composite products, even if the dairy isn’t part of China itself. It’s part of an old EU law that was inherited.”

 

There are also “quite high” tariffs on Chinese food arriving in the UK, though typically not as high – or unpredictable – as the US. Trump’s scattergun volley of tariffs on countries across the world in April hit goods from China with a 54% levy. The levy reached 145% in May in the tit-for-tat trade war between the two countries, before dropping to 30%, where it stands as of 26 November, according to Expana’s weekly tariff report. In a similar timeframe, Chinese food exports to the US decreased by 12%, according to the FDF. Meanwhile, Chinese producers exporting to the UK “face the UK global tariff – they don’t get any preferential rates”, says Hyde. This varies according to food type, with processed foods attracting in the region of 5%-20%.

 

“The UK global tariff was inherited from the EU,” says Hyde. “It can be pretty steep. In spite of that, we’re seeing quite persistent increases in exports from China. It’s quite a broad range of products and some of the increases, albeit from a relatively small starting base, are high in percentage terms.  The stats are quite consistent now, showing consistent increase. I wouldn’t be surprised if it continues.”

 

John Miller, chief economic analyst for Trade Data Monitor, says: “An export economy like China’s abhors a vacuum, and the UK remains one of the world’s richest markets for food exports. That’s why, in 2025, UK imports of Chinese fish, edible fruits and nuts, sugars, and coffee and tea have all increased.


Source: The Grocer and DRC


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