Almost all Irish food and drink companies now claim to be ‘Brexit-ready’. However, as many as 68 per cent of them are still uncertain what impact there will be from it, a new report finds.
The study from State body Bord Bia reveals that 93 per cent of companies in the sector have strategies in place to protect themselves from the impact of Britain's exit from the European Union, up from 74 per cent a year ago.
Moreover, 70 per cent of food and drink producers also have contingency plans for holding stock in anticipation of shortages, with 85 per cent of these having already activated such strategies.
But, while companies here have been busy developing strategies, a perceieved lack of Brexit planning by customers in the UK may create challenges for Irish food drink manufacturers, Bord Bia warned.
“There is an impression that some UK customers have yet to design clear protocols on where and how to source current EU products post-Brexit, which may result in difficult commercial planning for Irish suppliers later in the year,” the agency said in its report.
“There is a view that Irish retailers and foodservice customers have conducted more in-depth planning and analysis and are therefore more prepared for the complexities of Brexit than their UK counterparts,” it added.
The UK accounted for 37 per cent of all Irish food and drink exports last year, amounting to trade worth €4.5 billion. The value of exports to the UK in the first quarter of this year totalled €1.14bilion, up 6 per cent versus the same quarter a year ago.
Despite the threat of Brexit, 66 per cent of companies surveyed said they intend to maintain or grow sales in Britain over the coming years, while three quarters are also actively looking towards new markets.
Bord Bia’s ‘Brexit Barometer’ shows that just over half of exporters in the sector are holding up to three weeks worth of stock outside of the State.
Unsurprisingly, 62 per cent of companies surveyed said Brexit is having an impact on their investment plans with 29 per cent saying that investments have been put on hold. Some 45 per cent of respondents also said they expect Brexit to cost them up to 10 per cent of profitability.
As many as 96 per cent of Irish food and drink producers said they had spoken to customers about Brexit recently with the key topics of discussion being stockholding and customs duties.
Bord Bia said it expected the UK would remain an important export market for the Irish agri-food sector, regardless of Brexit. However, chief executive Tara McCarthy also welcomed the move by exporters to enter new markets.
“It is clear that more and more Irish companies are actively looking beyond familiar marketplaces and this process is set to gain momentum as planning around Brexit translates into concrete actions,” she said.
