Irish producers prepared for Brexit spikes, as levels of stockholding doubles
The recently published 2019 Bord Bia Brexit Barometer has revealed that Irish food and drink firms' preparedness for Brexit has jumped to 93%.
According to the report, this figure, which has risen from 74% since the 2018 report, highlights the mutual importance of the relationship between the UK and Ireland, as businesses prepare for a number of possible Brexit scenarios.
In spite of the research showing that 57% of respondents reported an increase in sales to the UK and a further 29% reported stable revenues, the report has also revealed that Irish firms are becoming increasingly concerned by the cost implications of customs compliance and stockholding; potential challenges around logistics; and, consequently, many have halted investment plans due to the continued uncertainty of the evolving Brexit landscape.
Launching the report, the minister for agriculture, food and the marine, Michael Creed, said: "Amidst the continuing uncertainty around Brexit, this report highlights the true value of preparedness. My department, working with Bord Bia, has dedicated considerable resources to ensuring that the unique position of the Irish food and drink industry in all Brexit scenarios is firmly understood. The coming months will bring another Brexit deadline, but it is encouraging to see that our industry is doing all it can to prioritise what it can control in facing these challenges."
Tara McCarthy, CEO of Bord Bia, said that it points to a year of emphatic progress as Ireland's largest indigenous industry prepares for one of its most significant challenges ever. She added: "With 93% of food and drinks companies that responded to the Barometer, representing 72% of all UK exports, makings plans and taking action, we have witnessed transformative levels of engagement due to two interlinked factors: firstly, the expectation for much of 2018 that a negotiated agreement was finally in sight and, secondly, the return to prominence of a ‘cliff edge' no deal Brexit which remains a looming threat. This experience left Irish exporters in no doubt that their future trading relationship with UK customers should be managed as a priority.
Further findings from the report show that 70% of companies surveyed have developed contingency options for holding stock in response to Brexit, with 85% of companies activating those plans. Stockholding adds a layer of unrecoverable cost for companies and it is important that this is incorporated into financial planning. And 62% of food and drink firms outlined that Brexit is having an impact on their investment plans, compared to one year ago when 50% said that Brexit was having no impact on their plans.
Between April and May 2019, 130 Irish food, drink and horticulture companies undertook the Brexit Barometer assessment. Of those 130 companies, 82% currently export to the UK.
