‘We have no intention of stepping back from the UK market’

The UK market remains a priority for the Irish agri-food sector in the face of Brexit, according to the Minister for Agriculture, Food and the Marine, Michael Creed.

As it stands, 35% of Irish food and drink exports – with a value of €4.5 billion – are destined for the UK; down from 37%, according to Bord Bia.

Speaking at the launch of Bord Bia’s Export Performance and Prospects 2017-2018 report, Minister Creed was adamant that the relationships between Irish agri-food exporters and customers in the UK market will be maintained and built upon in the coming years.

He said: “Our trading relationship with the UK in the agri-food sector can be summarised in one simple set of statistics; the UK is the largest external supplier of food and drink in Ireland, but – more importantly from our point of view – we are the largest supplier of food and drink to the UK.

With a population of 66 million to feed, that is an important marketplace to be in.

“Brexit will remain a major challenge in 2018 and in the coming years, as we move our way forward through the rounds of complex negotiations.”

The minister explained that both he and his department believe that the key tasks of the negotiations should be:

  • Continued free access to the UK market, without tariffs and with minimal additional customs and administrative procedures;
  • A minimisation of the risk from UK trade agreements with third countries;
  • The maintenance of current access to fishing grounds in the UK zone.

Despite the huge task facing Ireland as a result of the negotiations, there are also enormous opportunities present in the UK market, according to Minister Creed.

Continuing, he said: “We intend to continue to demonstrate our commitment to the UK market and to pursue those opportunities relentlessly.

We have no intention of stepping back from the UK market; on the contrary, we will redouble our efforts to build on our consumer reputation and strong relationships, to maximise growth and to supply high-quality and innovative products to our neighbouring island.

Meanwhile, the minister is convinced that the “integration of the supply chains between Ireland and the UK will be a key strength as we plot our way through the implications of Brexit”.

“While there is a long way to go in the Brexit negotiations, I believe that the December political agreement between the European Union and the UK on island-of-Ireland issues makes the prospect of a sensible withdrawal agreement, transition and future trading relationship much more likely,” he added.

Brexit loan scheme on the horizon

At this morning’s event, Minister Creed also outlined that he would shortly launch a new Brexit loan scheme, which he said would provide flexible and affordable financing for Irish businesses that are currently impacted by Brexit or businesses that will be impacted in the future.

“I will do this together with my colleague, the Minister for Business, Enterprise and Innovation.

“The scheme will make up to €300 million of working capital finance available to SMEs (small and medium sized enterprises) and mid-cap businesses – given their unique exposure to the UK market. My department’s funding ensures that at least 40% of the fund will be available to food businesses.

The finance will be easier to access, more competitively priced – at a proposed interest rate of 4% – and at more favourable terms than current offerings.

“This will give Brexit-impacted businesses time and space to adapt and to grow into the future. The new scheme will be delivered by the Strategic Banking Corporation of Ireland (SBCI) through commercial lenders and it is expected to be in place by March of this year,” he said.

Funding of €25 million has also been secured for the department to facilitate the development of a new Brexit response loan scheme during 2018 for farmers, fishermen and for longer-term capital financing for food businesses, the minister added.

‘Unique exposure’

“We all understand the unique exposure of the agri-food sector to the Brexit impact.

“Uncertainty, about the final outcomes can make planning for the future difficult; but, one thing that we can be sure of is that both food businesses and farmers need to focus on competitiveness and innovation in order to survive these challenges and grow their businesses sustainably into the future.

“Supporting lower-cost, flexible financing is a key government response to assist the sector in this process,” Minister Creed concluded.