IN spite of the huge impact of the BSE crisis on the international market for Irish beef, An Bord Bia chief executive Michael Duffy believes the market can recover.
"We've had an earthquake, and we're still dealing with the aftershocks. . . but I still think that we can, over time, recover a market position." The European market, which accounts for about 55 per cent of all Irish beef exports, has fallen by about 40 per cent.
One of the early aftershocks was that many consumers turned to suppliers from their own country, so the role of imported product has been doubly affected.
"There has been an overall reduction in consumption and a nationalisation of the markets," says Mr Duffy. "We don't have specific figures (for Irish beef exports) but we know that they've been very badly hit."
The drop in consumption differs widely from country to country. In Germany, where in depth media coverage of the BSE scare has been commonplace for several years, consumption is still down by 50 per cent. But in Holland where sales were initially halved consumption has increased and sales are now at about 90 per cent of their level before the House of Commons statement on March 20th. But even the Dutch "recovery" still represents a fall in sales of 10 per cent.
Mr Duffy says the time scale for any recovery depends on several factors. The European authorities in Brussels and the various national governments will have to mount a co-ordinated EU wide beef promotion scheme, which should also include major retailers. This will play a vital role in rebuilding consumer confidence, according to Mr Duffy. The programme, which could cost up to £20 million, will have to be based on substance rather than "glossy PR", he argues.
Mr Duffy is also quick to warn against any EU scheme that would stimulate protectionism. "It has to be a generic programme to regain confidence in the product and thereby stimulate consumption, but not give rise to nationalism."
There are also suggestions in Brussels that the country of origin for beef will in future be labelled within the EU, which could be to Ireland's long term advantage, says Mr Duffy. If such a decision is taken, the Irish beef industry is likely to stress its quality assurance scheme as well as its product performance.
Labelling beef as Irish will help consumers differentiate between the Republic and Britain. Further developments, either positive or negative, in the BSE/CJD story will influence the recovery, or otherwise, of the beef trade.
Within the industry there are two distinct views on the long term impact of the BSE crisis, according to Mr Duffy. Some commentators argue that it is too early to say how it will shake out, while others say there will be a structural change in the industry as it is never going to recover 10 per cent of the lost business.
Mr Duffy says the trade believes it has lost a certain level of consumption permanently but he says the marketing challenge for the industry is how to recover that consumption.
Despite a drop in beef consumption in Europe even before the BSE crisis, Mr Duffy says the market for the product is actually increasing worldwide as a food deficit is forecast for the 21st century with the global population expected to grow by four billion between now and the year 2050.
Mr Duffy points out that last year Irish beef exports increased by 7 per cent. "We are fortunate from an Irish perspective that we have a very good product, a product that performs, a product that prior to March 20th was in demand as shown by our growth rates."
