A new report by Food Drink Ireland (FDI) highlights an “extremely challenging” time for food companies, according to FDI deputy director Linda Stuart-Trainor.
The FDI Business Monitor, which tracks retail, economic and consumer trends, showed a fall in food retail sales values, both month-on-month by 3.57% and year-on-year by 3.42%.
The Consumer Price Index (CPI) rose by 2.2% between July 2023 and July 2024, according to the report.
Producer prices for food products dropped by 4.4% in the 12 months to June 2024, driven by dairy products, which were down 13.9%, along with grain milling, starches and animal feeds which were down 5.3%.
Stuart-Trainor said that retail is the “primary route” to market for the food sector, and that cost levels are “impacting on margins”.
“The state has both a significant forecasted budget surplus and is running a significant surplus in the balance of payments. Sharpening our competitive edge is within the gift of the government.
“There is an increased need to build resilience against rising costs and wider competitiveness pressures whilst investing heavily in resource efficient processes and accelerating digital transformation measures,” Stuart-Trainor said.
FDI
With Budget 2025 just weeks away and a general election looming, FDI is calling on government to “support productivity and sustainability” in the sector.
FDI’s budget submission makes several recommendations to help achieve these aims, including the following for sustainable food and drink production:
- State supports for decarbonisation across a range of technologies and solutions to meet the ambitious climate targets set out for the sector;
- An exchequer funded operational support to grow biomethane production;
- An extension of the welcome accelerated tax allowances and capital grants for farmers for Slurry Tank Capacity Expansion, and for LESS Slurry Spreading equipment;
- Significant investment in dairy calf to beef systems, continued funding of the National Genotyping Scheme and supports for earlier finishing of cattle.
The budget submission also calls for future increases in excise on consumer products to be ruled out and the avoidance of any further discriminatory taxes on food and drink products.