82% of Irish food and drinks businesses are optimistic about the coming years, despite facing higher costs selling goods to the UK since its departure from the EU.
Bord Bia’s Readiness Radar report, based on a survey of 111 Irish businesses from across the sector, highlights the challenges presented by Brexit and the pandemic. However, both the short and long-term outlook has remained positive after 2020 exports saw only a marginal 2% decline to €13bn.
The trading relationship with the UK and the implications of Brexit remains a key issue, with 45% of businesses surveyed reporting that they have seen the value of their exports decline since the referendum in 2016. A stark 90% of the Irish businesses exporting to Britain reported an increase in costs of doing business post-Brexit, and for 80% of these, margins have been reduced which has led to price increases for British customers, therefore impacting adversely on competitiveness.
To help offset some of the impacts of Brexit, the businesses surveyed remain focused on the need to diversify into new export markets. The EU was identified as the most significant prospect in terms of market diversification, with positive expectations for Asian markets in particular from larger enterprises and those in the meat, dairy, and seafood sectors. Some 46% (or €871m) of total export growth since 2016 (€1.9bn) came from the EU27, while international markets accounted for 43% (or €817m).
“The food and drink industry has bravely confronted Covid-19 and Brexit disruption, however the adverse effects of Brexit on margins and costs signal the significant challenges still facing the sector,” said Bord Bia Chief Executive Tara McCarthy.
“This year’s Readiness Radar provides us with excellent up to date insight into the biggest risks facing the industry and will allow us to continue to tailor our supports for the sector to help maintain and grow food exports now and into the future.”
