Ireland will receive over €1 billion (25 percent) from the EU Brexit fund in 2021. However, local industry stakeholders under Food Drink Ireland (FDI) have called for targeted support measures in the sector that will help businesses stay buoyant during the transitional period.
“Irish food and drink sector is by far the most exposed of any sector in any country in Europe to Brexit,” underscores Paul Kelly, director of the FDI.
“Even with a EU-UK deal, we now face additional paperwork, customs and SPS formalities, transport delays and disruption to delivery schedules.”
In recent developments, Marks & Spencer revealed it was temporarily suspending popular food items including chocolate fudge pudding and sweet and sour chicken from its Northern Ireland shops following the barring of its competitors traveling between the mainland and Northern Ireland.
Irish sector remains bolstered amid headwinds
Kelly stresses that all these Brexit changes are imposing additional costs on businesses. All in all, this encompasses Ireland’s entire farming sector and its longer-term sustainability.
“The publication of Bord Bia’s Export Performance and Prospects report, shows the resilience of Ireland’s F&B sector in the face of unprecedented global challenges in 2020 with just a marginal 2 percent decline in exports,” he highlights.
“However, the departure of the UK from the European Union creates challenges for the sector that the Brexit Adjustment Fund can help offset.”
In talks with MPs, UK Food and Drink Federation (FDF) chief executive Ian Wright echoed the sentiment that there will be both short and long-term costs to “re-engineering” supply chains.
“Unless the deal changes in some material way, we’re going to see the re-engineering of almost all the EU-UK and GB-NI supply chains over the next six to nine months,” he told the UK Parliament’s Committee on the Future Relationship with the European Union.
“In the short term, there will be costs and time wasted for supply to reach the shelves, and in the long term will be costs and changes, and fairly significant changes, to the way in which manufacturers in the UK and in the EU interact when they are producing products,” he said.
Urgently necessitated support measures
The additional trading costs now materializing post-Brexit have been identified. In this context, the need for renewed focus on F&B innovation to regain competitiveness following the single market fracture is underscored by the organization.
FDI is calling for investment aids to support Irish F&B companies invest in enabling technology, management training and upskilling, plant renewal and expansion, refinancing and market development.
The organization also calls for a state-supported export credit insurance scheme to ensure the growing gap in supply of export credit insurance does not impact on the ability of Irish firms to export. “Many EU governments have already acted to support our competitors,” it highlights.
Moreover, additional funding is necessitated for direct grant supports for innovation, marketing and trade promotion for companies looking to build new markets in the EU and internationally.
FDI advises that state agencies make full use of the new state aid guidelines to fund up to 50 percent of research and development projects which support future business growth.
Among other outlined support measures include ensuring smooth trade through sufficient accompanied roll on or roll off capacity for direct ferry routes to the continent. FDI calls for direct supports to cover the additional ongoing costs associated with developing and maintaining customs clearance capability.
These supports will be required throughout the remainder of 2021, it maintains.
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