More than four fifths (89%) of Irish food and drink firms are wary of the impact that customs compliance with the UK and Northern Ireland will have on their business, once the Brexit process is complete, a study has found.
The quarterly Business Monitor by Food Drink Ireland (FDI), the representative group that represents the Irish food and drink sector, also found that 72% of food and drink businesses believe Brexit will have an impact on all-island supply chains on the island of Ireland.
In addition, two thirds (67%) believe Brexit will have an impact on exchange rate movements, while more than half (56%) believe it will impact export sales.
Brexit Planning
“Food and drink companies are actively engaged in Brexit planning,” said FDI Director Paul Kelly. “With 35% of food and drink exports going to the UK and further 33% destined for the rest of the EU mainly via the UK land-bridge, it is clear they are more worried than other business sectors, even though they are better prepared.”
The study also found that 59% of Irish food and drink companies had a hedging or pricing arrangement in place, compared with 35% of businesses generally.
Among the measures Irish businesses are taking to nullify the impact of Brexit are an increased focus on new geographical markets outside the UK (50%), diversification of business into new products (33%) and alternatives to transit of goods through the UK (28%).
Mitigate The Risks
The FDII called on the Irish government to “implement policies to help mitigate the risks facing the sector by addressing cost competitiveness in the economy and helping companies innovate and improve productivity,” said Kelly.
“FDI continues to call for Brexit policy measures to support and protect Ireland’s most important indigenous sector including a transition period of sufficient duration; an ambitious EU-UK future trade agreement that avoids tariffs, TRQs and regulatory divergence and no hard border with Northern Ireland. There is also a compelling case for exceptional state aid support to minimise the economic fallout arising from Brexit.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
