Greater fear of Brexit in food and drink sector, says Ibec

More than eight out of 10 food and drink companies fear Brexit’s impact but are better prepared for the United Kingdom’s departure from the European Union than other businesses, employers’ group Ibec says.

Food Drink Ireland, the Ibec subdivision that represents the industry, says that 59 per cent of these companies have hedging and other safeguards in place ahead of Brexit next April.

However, 83 per cent of them fear that customs costs will rise after the UK’s departure, about two-thirds expect a hit from exchange rate movements and almost 60 per cent believe the value of sales will fall.

Half of the Republic’s food and drink companies are focusing on new markets outside the UK, compared with 32 per cent for all businesses while one-third are developing new products, against one-quarter generally.

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Alternative routes

Almost 30 per cent of them are looking for alternative routes to the EU that avoid going through the UK while 22 per cent are looking for new suppliers.

Paul Kelly, director of Food Drink Ireland, pointed out that the industry was actively preparing for Brexit.

“With 35 per cent of food and drink exports going to the UK and a further 33 per cent destined for the rest of the EU mainly via the UK land bridge, it is clear that they are more worried than other business sectors, even though they are better-prepared,” he said.

To protect the industry, his organisation wants a sufficiently long transition period, an EU-UK deal that avoids tariffs and regulatory differences and no hard border with Northern Ireland.

“There is also a compelling case for exceptional state aid support to minimise the economic fallout arising from Brexit,” Mr Kelly added.