Britain’s decision to exit the European Union following yesterday’s referendum vote will give rise to high levels of uncertainty over the coming years, according to Meat Industry Ireland (MII).
The Director of the association representing meat factories, Cormac Healy said the UK is a significant market for Irish meat, as exports are valued at €2 billion annually.
“The reality of a Brexit following the outcome of yesterday’s UK referendum is clearly a major concern for our meat export trade to the UK.
The collapse in the value of sterling and its impact on returns from the UK market is the immediate issue.
Ireland to continue exporting meat to the UK
However, despite the uncertainty facing meat exports from Ireland to the UK over the coming years, Healy said that there is no question but that Irish beef, lamb, pigmeat and poultry exports to the UK will continue.
“We believe that the sheer scale and importance of the meat trade flows between Ireland and the UK, coupled with our traditional trading links and the strong business-to-business relationships, will ensure that trade continues even if at reduced volumes and price,” he said.
However, Healy also said that there are many long term negative implications of a Brexit.
These range from the potential increased cost of doing business, day-to-day customs and certification implications and a concern that the UK will seek to conclude bilateral trade deals with countries such as Brazil to cushion the impact of Brexit on food prices, he said.
“Such deals would also undermine the competitive position of Irish meat in the UK. These are all factors which will need to be addressed during what is likely to be a protracted negotiation process in Brussels.
“MII has consistently highlighted that the biggest immediate concern is the market uncertainty that a Brexit decision generates.
“That uncertainty has already led to a substantial weakening of sterling over recent months and now we have seen a further 10% collapse in the sterling-Euro rate in the last 12 hours.
Healy added that this greatly challenges the competitiveness of meat exports to the UK.
He also said that another concerning factor is the impact it will have on consumer spending in the UK and its implications for meat sales.
The UK economy looks set for a very rocky period and weaker consumer sentiment will likely negatively impact all grocery sales including meat.