Food and drink manufacturers are calling on the government to extend current energy support schemes as they continue to battle “high food inflation and ongoing cost pressures”.
The industry group Food and Drink Ireland (FDI), which is part of Ibec and represents 150 manufactures and suppliers, said that latest industry data highlights that “long-term inflationary trends in transport and energy” are an ongoing challenge.
The group also warned today (Monday, July 24) that new border controls to be introduced by the British government from October 31, 2023 will “further exacerbate” high input business costs.
According to FDI it “is essential” that the government supports the food and drink sector and extends the two current energy support schemes which include the Temporary Business Energy Support Scheme (TBESS) and the Ukraine Enterprise Crisis Scheme (UECS) .
TBESS currently runs until July 31, but the time limit for all claims under the scheme has been extended to September 30.
Eligible businesses have to be able to demonstrate that they have passed an “energy costs threshold” to qualify for TBESS – which typically means that the average unit price for electricity or natural gas has increased by 30% or more.
There is currently a €15,000 monthly cap on payments and a €30,000 monthly cap for companies that have multiple locations.
Meanwhile, the UECS is a support scheme for businesses experiencing “significant financial difficulty as a result of increased energy costs arising from the war in Ukraine”.
In order to qualify for the scheme businesses have to be able to demonstrate that it is a manufacturer or provider of an internationally traded service. They most also have recorded a 15% drop in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
FDI believes that the criteria to qualify for both energy support schemes should also be broadened to ensure that more companies can receive government support.
Energy supports
Jonathan McDade, deputy director of FDI said: “The food and drink sector continues to endure during challenging times and faces ongoing costs due to Brexit and more specifically the forthcoming introduction of border controls to our largest export market which is why FDI is calling for the extension of the government’s two energy support schemes.”
According to the organisation’s latest Business Monitor Quarter Two – based on data from a number of sources – inflation continues to be an issue with food and non-alcoholic beverages in June rising by 10.2% compared to the same month last year.
But FDI has also noted that the pace of inflation has slowed.
“Long-term trends however show significant increases in wages, transport costs and wholesale energy prices compared to three years ago.
“Prices on average in Ireland, as measured by the EU Harmonised Index of Consumer Prices (HICP), increased by 4.8% in June 2023 compared with June 2022,” the organisation stated.