Regulations hinder food sector - Ibec

Ireland's €18 billion food and drink sector is under threat as a result of costly regulations, "farm to fork" world trade policies and an uncoordinated Government approach to the sector, according to a report published yesterday by Food and Drink Industry Ireland (FDII).

The group, which is part of employers' body Ibec, says the food industry should not be blamed for rising rates of obesity and that physical activity levels and personal responsibility come into play. It also calls for a ban on predatory pricing by retailers.

The analysis highlights the sector's major contribution to the economy, but says its ability to be "a powerhouse of national wealth" is being threatened.

FDII chairman Larry Murrin said continuing sustainable economic prosperity was crucially dependent on prioritising the food and drink industry, which supplies the majority of the €7 billion worth of food and drink products consumed in the Republic every year and has annual exports of almost €7.5 billion.

Mr Murrin warned that the three separate Government departments that have responsibility for food sector policy were pursuing different agendas, which was directly undermining the sector's competitiveness.

"The pursuit of a cheap food policy does not sit well with the major public policy concerns highlighted by the growing levels of obesity," the report concludes.

It calls for the establishment of a single department to handle food sector policies, which are spread across the Department of Agriculture and Food, the Department of Enterprise, Trade and Employment, and the Department of Health and Children.

The Government must pursue a trade policy that recognises the importance of the sector to the wider economy, the report says.

On a gross value added (GVA) basis, the food and drink sector contributes €8.1 billion to the economy and is the biggest single generator of economic activity in the manufacturing industry.

The industry employs 46,000 people directly and 60,000 people in distribution and other services. If Ireland's 120,000 farmers are taken into account, total employment linked to the sector is almost 230,000.

But EU measures to manage surpluses will have a disproportionate effect on the Republic, while an "unbalanced" World Trade Organisation deal that benefits large-scale corporations operating in Brazil, India and China could reduce agricultural production here.

"The Government must guard against further giveaways by the EU in any resumption of trade talks," the report says.

Meanwhile, Government and EU authorities examining the introduction of regulations that restrict the nutritional content and marketing of food and drink should not be swayed by "popular prejudice" in relation to convenience food, the FDII said. The cost to the industry of any regulations should be considered.

The industry has "invested significantly" in the convenience food sector in response to consumer demand, the report notes.

"The food industry cannot simply ignore the demand for convenience is not solely responsible for consumption of food and drink. Responsible consumption must be recognised as largely a matter of personal choice and responsibility," Mr Murrin said.

The root causes of obesity and other lifestyle-related conditions like diabetes are "multiple, complex and often difficult to disentangle", it adds.

Manufacturers and suppliers are increasingly vulnerable to predatory pricing as a result of the Groceries Order's abolition, it says. Retailers with significant buying power are compelling suppliers to fund discounting and promotional activity, putting pressure on suppliers' margins.