Future outlook

The economic contribution of the food and drink industry is greater than any other manufacturing sector due to its deep linkages to the wider economy, particularly in regional areas. Whilst the current business environment for food and drink companies is difficult, it is deeply resilient and the longer-term growth opportunities largely remain for the sector. However, the immediate response must be to ensure the sector is fit for purpose to meet the substantial challenges ahead.

Brexit involves an unprecedented fracture of the Single Market, with Ireland particularly exposed. Agri-food and drink remains particularly reliant on the UK market and is the sector most exposed to Brexit. Whilst the UK as a percentage of our overall exports has dropped in recent years and now stands at 37%, in absolute value terms it continues to increase and now stands at €4.5bn (a 32% increase since 2010). This demonstrates the importance of maintaining our market position in this high value, high quality market that has a substantial food deficit and not relinquishing the market to global competitors. Irish food and drink exposure in absolute value terms is similar to other large exporters to the UK (France, Belgium, Netherlands, Germany, Italy). However, in percentage terms we are 4 – 5 times higher. Typically, less than 10% of those other member states agri-food exports are to UK. This highlights the unique circumstances faced by Irish agri-food and the need for exceptional mitigation measures. A further €4bn of exports go to the other EU-26 with most using the UK land-bridge. Protecting our connectivity to Continental EU markets is critical. It is also an important trade route for food ingredients and finished goods travelling from the continent to Ireland.

Whilst agri-food is most at risk in any Brexit outcome, most particularly in a hard Brexit, the sector must also respond to the challenges of public health, sustainability and competitiveness. A hugely important measure to mitigate these risks is to implement policies to control our cost base whilst helping companies innovate and improve both productivity and sustainability. With one in eight jobs in the economy linked to agri-food, failure to do this will be damaging to the wider economy and not just the food and drink industry.
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