Seanad committee hears FDI and MII concerns over Brexit

Delegates from Food Drink Ireland (FDI) and Meat Industry Ireland (MII) this week met before the Seanad Select Committee on the Withdrawal of the UK from the EU.

They outlined the key issues and measures needed at both a domestic and EU level for the sector in light of the UK’s decision to exit the bloc.

There was a particular emphasis on the need to maintain tariff-free access to the British market post-Brexit and for an EU state aid structure, in order to support vulnerable businesses through the transition.

“The agri-food sector exports €4.1 billion of food and drink to the UK and accounts for 43,000 Irish jobs,” FDI Director Paul Kelly said.

With 40% of total food and drink exports going to the UK, Ireland is four to six times more exposed than any other European country to Brexit.

“Supply chains in the food sector are deeply integrated between our two countries. The continued, uninterrupted flow of these supply chains is essential to the competitiveness of food and drink businesses on both islands,” he added.

“It is vital that Brexit negotiations deliver the closest possible economic and trading relationship between the EU and the UK into the future.

Agri-food is the Irish sector most exposed to trade disruption, and the Irish government must do all within its control to ensure minimum impact to the free flow of goods.

“Discussions on the future EU-UK relationship must begin early in the negotiating process and must deliver a comprehensive free trade agreement between the EU and UK, ideally with the UK remaining within the EU Customs Union.

“Transitional arrangements, of sufficient length for businesses to plan and prepare for any new free trade agreement, are vital. Customs procedures should be dealt with as part of the first phase of Article 50 negotiations,” Kelly said.

This comes after figures showed export growth to the UK declined to 2% last year after a weakening of sterling put a downward pressure on demand for Irish food products.

The FDI and MII put together a series of short-to-medium term measures needed to support and reinforce the agri-food sector.

These include:
  • The relaxation of state aid restrictions that affect the ability of Ireland to apply critical stabilisation support measures and strategic transformative initiatives in light of the potentially serious economic impact of Brexit.
  • An intense and continuous focus on cost competitiveness in areas such as energy, insurance and labour.
  • The re-introduction of the Employment Subsidy Scheme and the Enterprise Stabilisation measures, last utilised during the financial crisis in 2009-2011.
  • €25 million in funding for market diversification and product innovation measures, to be looked after by Bord Bia and Enterprise Ireland.
  • Trade support measures, including export trade financing and export credit guarantees, to support the continued development and growth of international export markets.
  • A substantial increase in resourcing of the international market access unit of the Department of Agriculture, Food and the Marine.
  • Access to a finance package that includes sustainable financing via funding from the Irish Strategic Investment Fund and the Strategic Banking Corporation of Ireland.