British food replacement brand Huel has been bought by the French food group Danone in a deal reported to be worth €1 billion. Some might see this as a great national success story: a plucky startup from Buckinghamshire has taken the food market by storm and generated hundreds of millions of pounds for shareholders. Unfortunately, this is exactly the sort of comforting tale that has lulled Britons into a false sense of economic security.

Since its founding over a decade ago, Huel has grown rapidly. However, it is only now that the company is generating significant profits, with sales increasing 4.5% last year. Just as it matures into a major global player, with over half of its sales coming from overseas, the resulting revenue and profits will flow to French and American shareholders. Huel is not alone. According to research by The Purposeful Company, nearly 3,000 private UK high-growth businesses have been bought by overseas buyers in the past decade.

Britain has a growth problem, yet politicians rarely discuss one of the most significant causes: namely, the country’s inability to compete for global trade. The Office for Budget Responsibility predicts that this year the UK trade deficit will be £39 billion, equivalent to a little under 1% of GDP. This means that the British economy will be 1% smaller than it otherwise would have been had its trade been balanced. To put this into context, the OBR only expects the economy to grow by 1.1% this year, so closing this deficit would be equivalent to doubling the country’s rate of economic growth. Endless column inches are devoted to planning reform and vague “regulatory barriers”, but trade is rarely debated.

A lot of the focus now is on the country’s energy security, given the war in Iran. While high energy costs have contributed to the UK’s uncompetitive global trade position, ownership also matters. Decisions about where Huel will invest and expand its operations will be made in Paris, not the UK. Danone is a global company whose production is heavily concentrated in continental Europe, particularly Poland, and North America. The expectation is that the company’s IP will be transferred to those larger-production overseas sites to make use of Danone’s “scale, capabilities and global reach”, according to the sale press release.

In short, exports which would have been generated in Britain are likely to go elsewhere. It’s no surprise that as overseas ownership of manufacturing has increased, investment levels have decreased. For example, the total value of assets in the food manufacturing sector alone has fallen by £800 million since 2019.

The Huel sale is a potential double whammy, because the key to Britain’s trade deficit is an inability to mass-produce the goods that we need and the rest of the world wants. In the three months to January 2026, the country’s goods deficit stood at £56.6 billion. Its much-vaunted services sector only brought in £54.8 billion. This gap has been a significant contributor to the country’s economic and financial decline for decades. Packets of powdered food may not seem that important, but our economic future depends on products like these. After all, the food and drink industry is the UK’s largest manufacturing sector, representing over a fifth of manufacturing sales in 2024.

If you want to win in a capitalist system, the clue is in the name. If you own firms, you are in the driving seat, possessing both the strategic initiative and the rewards of production. If you do not own your own businesses and are dependent on the rest of the world for investment, you are just waiting for the crumbs to fall off the table. This is the fundamental truth of global trade which has been forgotten over the past 50 years. Rachel Reeves said last week that she will “stand behind British business”. But the Chancellor should ask herself a question: how many high-growth businesses will there be left to stand behind?

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Andrew O’Brien is the former Director of Policy at the think tank Demos and currently Head of Secretariat of the Independent Commission on Neighbourhoods. He writes in a personal capacity.

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