THOUSANDS OF JOBS could be under threat in the aftermath of June’s Brexit vote in Ireland’s food and drink sector according to two new reports.
A report from Food and Drink Industry Ireland (FDII, an Ibec group) has suggested that competitive pressure within the sector has been ramped up significantly in the aftermath of the UK’s vote to leave the European Union.
Much of the report concerns historic economic analysis, with the suggestions that a 1% decrease in the value of sterling results in a 0.7% drop in Irish exports to Britain.
That translates to losses of about €700 million and 7,500 jobs should sterling dip towards a value of £0.90 versus the euro.
The report, which can be read here, calls for a review of Ireland’s national agri-food strategy FoodWise 2025, together with a ‘Brexit-proof’ budget to address the issue of Ireland’s tax competitiveness with the UK.
“Urgent action is now required to protect our vital exports to the UK market, limit damage in the domestic market from imports, and address competitive pressures caused by the fall in sterling,” said Paul Kelly, director of the FDII.
A failure to act will compound the pressure on exporters, undermine Ireland’s long-term position in the market and threaten jobs.
Perfect storm
Meanwhile, the CEO of the Restaurants Association of Ireland Adrian Cummins said that high excise duty on products and Brexit uncertainty have caused a “perfect storm” for both the restaurant trade and the tourism market here in general.
Cummins was speaking as the results of a poll of members suggested that there has been a downturn of 12% in British tourists’ spending here in July and August in the aftermath of Brexit, with the exchange rate with sterling again cited as a possible cause.
The trend is compounded in the Border counties where a decrease of 20% in British tourist spend is being seen according to the poll.
“Now that we are moving towards recovery, we need to take this heavy burden (excise increases) off consumers, tourists, businesses and employees across the drinks and hospitality sector,” said Cummins.
His call was reiterated by Padraig Cribben, CEO of the Vintners Federation of Ireland (VFI), who said “our members are feeling the pinch too”.
“Budget 2017 should compensate for the negative effect of Brexit, such as exchange rate uncertainty, impacts of a new border, and the impacts that Brexit might have on British tourist spend in Ireland,” he said.
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