Food industry warns of Brexit trade disruptions

The food industry in Republic will suffer significant trading disruptions if the December Brexit deal between the European Union and the UK is not implemented, Ibec group Food Drink Ireland (FDI) has warned.

The group said any backsliding on the commitments of the December deal would hit all-island supply chains, while barriers to trade with Britain would be a major blow to the Republic’s industry.

The €4.5 billion prepared consumer foods sector would be particularly exposed, FDI said in a new report. Exports from the sector, which employs more than 20,000 people, are worth an estimated €2.5 billion, and 65 per cent are to the UK.

The sector has already been hurt by Brexit. In 2016 exports of prepared consumer foods to the UK fell 9 per cent as a weaker sterling in the wake of the referendum result created “additional competitive pressures”.

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Of the Republic’s €4.1 billion food and drink exports to the UK in 2016, prepared consumer foods accounted for €1.6 billion, ahead of beef exports valued at €1.1 billion and dairy exports valued at €840 million.

“No food company in Ireland is unaffected by Brexit,” said Kevin McPartlan, FDI director of prepared consumer foods. “If the UK insists on leaving a customs union with the EU it will result in a significant disruption to trade.”

The Ibec body said “free and unfettered access” to the UK market for Irish business was a key priority for the food sector as the Brexit negotiations progress to phase two.

Special case

It said the agreement must take account of the special case of the cross-border economy, and must include transitional agreements of sufficient length for businesses to plan.

“Prepared consumer food companies are the life-blood of the Irish economy,” Mr McPartlan. “They depend on cross-border supply chains and infrastructure, are prone to currency variation, rely on access to the UK market, and need common regulatory regimes more than any other sector of the economy.”

Budget 2018’s announcement of a €5 million capital investment to fund research and innovation in the prepared consumer foods sector, while welcome, was “a mere foundation”, he said, and secure multiannual funding was now essential.