Brexit concerns to the fore for Ornua bosses
Ornua bosses are monitoring developments regarding the Brexit discussions very closely, given the potential impacts it has for Irish exports.
Last week, Ornua – Ireland’s largest exporter of Irish dairy products – published its operating and financial results for 2017.
It announced that its turnover increased by 18% to €2.1 billion last year compared to 2016.
But, the outcome of Brexit has the potential to have a significant impact on these targets.
Commenting on the matter, Lane said: “The best scenario is no change; that’s not going to happen.
“The worst scenario is a hard border and WTO (World Trade Organisation) tariffs. To give you some scale for that, if full EU tariffs were brought in, the penalty or levy on cheddar would be over €1,670/t and no consumer in Britain – or anywhere else – is going to stomach or eat that extra cost.
So it will be a wipe-out scenario for the majority of your exports into Britain. Butter is even worse; it would be closer to €1,900/t if you had full EU tariffs in a very hard border scenario.
“We’re already feeling the effects of Brexit today in something called sterling currency, in that our sales into Britain and our profitability returns back are affected by 12-15%.
“So Brexit is not a good news story,” he said.
Lane added that Ornua has a team working “incredibly hard” to protect its business and to mitigate the effects of Brexit.
“It is a very stark scenario for not just Irish dairy, but for Irish food, if a hard border is the end outcome of this Brexit discussion,” he added.
Cost of living
Meanwhile, a hard Brexit would increase the cost of living for all households in Ireland by 2% to 3.1% – an annual increase of €892 to €1,360 per household, according to a report by the Economic and Social Research Institute (ESRI).
Costs would rise the most for lower-income households, the report found.
These households spend a greater share of household expenditure on food products – many of which are imported from the UK and would be subject to tariffs, it added.
The percentage increase faced by the poorest households would be 70% more than the percentage increase faced by the wealthiest households, the report explained.