FDBusiness.com

80% of Irish Exporters Believe UK Still Offers Significant Potential

 Breaking News
  • Lactalis Expands in Infant Nutrition With €740 Million Acquisition Lactalis Group, the international dairy group based in Laval, France, is acquiring the Nutritional business of Aspen Pharmacare for €739.8 million (R12.9 billion). The business being acquired supplies a wide range of infant nutritional and growing-up milk products across both the premium and value segments. It manufactures and markets well established quality brands, including S-26, [...]...
  • Thatchers Cider to Invest £14 Million in New Cider Mill Thatchers Cider, the family owned English cider producer, is to invest £14 million in a new cider mill at its Myrtle Farm site in Somerset to meet growing demand for its products. The company has applied for planning permission and, if granted, the new mill would come on stream in 2019. “This investment is about our [...]...
  • Coca-Cola Great Britain Teams Up With Premier League Premier League and Coca-Cola Great Britain have announced a new three-and-a-half-year partnership, starting in January 2019. It is the first sponsorship Coca-Cola Great Britain will activate across multiple brands within its portfolio, showcasing a range of drinks including sparkling soft drinks, water and fruit-based drinks, with low and no-sugar options. The partnership will see Coca-Cola work [...]...
  • Barry Callebaut Completes $30 Million Capacity Expansion in North America Barry Callebaut, the world’s leading manufacturer of high-quality chocolate and cocoa products, has announced the completion of several expansion investments in three of its North American facilities located in St Hyacinthe, Quebec; Chatham, Ontario; and St Albans, Vermont. The investments amount to close to US$30 million and are in line with previously announced plans. Recent investments [...]...
  • Strong First Half From Hilton Food Group Hilton Food Group, the UK-based leading specialist international food packing business, has reported a 25.0% increase in turnover to £863.6 million and by 24.5% on a constant currency basis for the 28 weeks to 15 July 2018. Volumes increased by 12.7% reflecting growth in the UK, Ireland and Australia. Operating profit for the first half [...]...

80% of Irish Exporters Believe UK Still Offers Significant Potential

80% of Irish Exporters Believe UK Still Offers Significant Potential
July 03
09:38 2017

A new report launched by Bord Bia shows a renewed optimism for the Irish food and drink industry’s trading relationship with the UK market, worth over €4 billion last year. According to Bord Bia’s Brexit Barometer, almost 80% exporters surveyed believe there is still significant potential for future growth in the UK market, despite the fact that 85% of respondents are facing competition from UK based suppliers and 61% don’t have a marketing strategy for the market.

Over a 28 day period, some 139 food, drink and horticulture exporters completed Bord Bia’s Barometer, a risk analysis tool designed to help individual companies assess their exposure to six specific risk areas associated with Brexit – routes to market, customs and tax, supply chain, trade, currency and human resources. A team of Bord Bia managers conducted 65% of the meetings face to face, with in excess of 350 hours’ worth of data collection completed in total.

Bord Bia’s Brexit Barometer – report highlights:

Route to Market

  • Whilst strong UK trading relationships exist, the need for competitive insights, focused marketing strategies and customer acquisition plans are critical to future growth.
  • There was a realisation amongst Irish exporters that dependence is too great on the UK market and diversification will be important going forward.
  • Over 80% of respondents believe there are viable alternative markets for their products however sectors such as beef and cheddar cheese will be challenged to find replacement markets.
  • To realise new business outside the UK and similar to that of the UK market, localised marketing strategies, along with structured customer acquisition programmes and feet on the ground are critical to success.

Supply Chain Management

  • Increased lead times, especially when related to short shelf life products, and a complex and intense supply chain, is a key issue facing the industry.
  • Exporters with short shelf life products are most at risk, with the mushroom industry facing the greatest challenge, as the sector’s main product has a shelf like of less than 7 days. Likewise beef mince is challenged due to the complex and intensive supply chain.
  • In terms of supply chain risk management, a low level of preparedness is common, with 68% of respondents unsure as to whether their supply chain partners are Brexit ready.

Tara McCarthy, CEO of Bord Bia.

Customs & Trade

  • Implementation of new customs controls and potential tariffs is clearly the greatest concern. Overall, there is a lack of understanding in terms of customs compliance and potential tariff costs, with limited customs expertise within the industry
  • 31% of companies have limited or no experience in complying with official requirements relating to the importation or exportation of goods from/to non-EU locations, while 80% have not considered the VAT cashflow implications of Brexit
  • It is clear that the challenge facing the industry is considerable and not one which they can address without support.

Currency

  • Respondents believe they have reasonably well-developed practices for managing currency risk; however, this belief will be tested in the event of any further devaluation of Sterling. Companies need to invest in currency risk management strategies for the longer term in order to manage and limit this exposure.
  • If the exchange rates were to move towards parity, severe trading difficulties would be created for the industry which layered on top of the implementation of tariffs would essentially create the perfect storm for the Irish food and beverage industry. No sector is immune from the challenge and ongoing preparation is necessary.
  • In terms of exchange rates, an exchange rate of 0.89 would cause severe difficulties for 39% of respondents while a rate of 90p – 94p would cause difficulty for over 80%. Ensuring appropriate risk management tools are in place will help manage future currency fluctuations.

Tara McCarthy, CEO of Bord Bia, comments: “Brexit will demand a nuanced and concerted response from every level of the food industry. It will require new skills, new approaches and new thinking. We will need to be innovative, agile, informed and prepared as never before. These are demands that will be made on Bord Bia as much as the industry we represent. Following what we believe to be the most comprehensive industry analysis to date, we are currently engaged in a comprehensive review of our structures and programmes to ensure that we perform to the level required of us in this changing and challenging environment.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 15, 2018iba
  • September 25, 2018PPMA Show 2018
  • September 27, 2018Int'l Fruit Show (eurofruit)
  • September 30, 2018Trade Fair for Butchers, Caterers and Meat Industry (Meat Expo)
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements