Food Drink Ireland (FDI), a group that represents the Irish prepared consumer foods industry, has said that agreements to protect all-Ireland food supply chains post Brexit need to be copper-fastened.
The Ibec group said that the introduction of new barriers as a result of the UK leaving the customs union would be a "major blow" to the Irish food industry, with the prepared consumer foods sector likely to be particularly exposed.
The FDI said that a "binding legal contract" needs to be drawn up, following an agreement in principle last December, so there can be no "back-sliding" on clearly agreed commitments.
'Significant Disruption'
"If the UK insists on leaving a customs union with the EU, it will result in a significant disruption to trade," said the FDI's director of prepared consumer goods, Kevin McPartlan.
"While the December deal should protect all-island supply chains, new barriers to east-west trade with Britain would be a major blow to the Irish food industry. Prepared consumer food (PCF) companies are particularly exposed. The gross output of the Irish PCF sector is €4.5 billion, and €2.5 billion of that is exported – 65% of all PCF exports are to the UK."
The group added that it was increasingly concerned at the direction of the UK political debate, with the increasing likelihood of a divisive and damaging divorce as a result of the ruling-out of a future EU-UK customs union.
It has published a report, Brexit: The Challenge for Prepared Consumer Foods, which outlines the priorities for the Irish food industry.
Market Concerns
A survey of Irish prepared consumer foods businesses, undertaken by FDI, highlighted several key issues, including sustaining low-margin business in the UK, a further weakening sterling and possible tariffs. Supply chain cost increases as a result of Brexit and deferred investments due to uncertainty were also among the key concerns.
The report also identifies priorities for the sector as Brexit negotiations progress to Phase Two. The FDI argues for free and unfettered access to the UK market for Irish business. Further, it argues for the need for an agreement that takes the special case of the all-island economy into account.
The report also urges for there to be transitional agreements of sufficient length for businesses to plan and prepare for any new free-trade agreement. Finally, the report reads that any arrangements to deal with the Irish border should ensure strict adherence to EU regulations and customs duties for all products, particularly from third countries.
“Prepared consumer food companies are the lifeblood of the Irish economy,” McPartlan added. “They directly employ over 20,000 people and support the employment of many thousands more across the entire country, in small and medium enterprises, as well as major multinationals.
“They depend on cross-border supply chains and infrastructure, are prone to currency variation, rely on access to the UK market, and need common regulatory regimes more than any other sector of the economy.
“It is vital that a future EU-UK deal delivers free and unfettered access to the UK market, an agreement that takes account of the reality of our all-island economy, a transition period of sufficient duration to allow businesses to prepare for the new environment, and border arrangements which ensure strict adherence to EU regulations and customs,” McPartlan said.
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