Four out of 10 expect their sales to decline while three out of 10 expect them to remain unchanged and a third don’t know how it will impact them according to a recent Bord Bia survey coupled with one-to-one discussions.
The survey also revealed that exchange rate volatility is the overriding concern, cited by almost six out of 10 firms, followed by the prospect of tariffs and border controls, of concern to 20% of businesses.
While one in three companies say they will search out new markets, the remaining two-thirds will opt for alternative solutions, generally focusing on a reduction in costs and recovering losses from higher prices.
However the majority of companies are in the early stages of considering their options; few had put a formal plan in place prior to the result of the referendum.
The overwhelming need articulated by clients is for information and regular updates on the market and on the negotiations and implications as they unfold. Support to develop and defend their positions in the UK market and navigate through the changes is also prioritised and for those who believe they’ve the capacity to expand beyond the UK, there’s a demand for support to find new markets.
With Irish food and drink exports to the UK accounting for 41% of total exports in 2015 – valued at €4.4 billion and up 7% on the previous year -the exposure of the food and drink exporters to fallout from Brexit is more acute than any other sector.
In response to this, Bord Bia hosted a Brexit briefing event for over 180 food and drink exporters recently in Dublin as it commenced its range of support activities for the Irish agri-food industry.
At the event Bord Bia outlined its strategy for consolidating Ireland`s position in the UK market as it looks to equip exporters in managing short- and medium-term challenges following the Brexit decision.
The early morning event brought together exporters and specialists in currency management, UK consumer behaviour and EU trade regulations and followed on from intensive Bord Bia engagement with UK customers through its London office and its own post-Brexit survey of food and drink exporters.
The Irish companies, who had highlighted the need for information in Bord Bia’s post-Brexit survey, received insights from experts on current UK and EU market conditions and currency management. The ensuing panel discussions were designed to help exporters identify future pressure points in their business models that may require attention.
Opening the briefing session, Aidan Cotter, Chief Executive, Bord Bia said, “The purpose of the briefing is to explore and begin to understand the implications of Brexit for a market that takes 41% of our food and drink exports valued at €4.4 billion. Our hope is that today`s event may advance all of our deliberations and if we can’t resolve the uncertainty – and clearly we can’t – that at least we can now begin to learn how we can deal with it and live with it. The learnings from today and our ongoing close contact with our clients will inform our future supports for the sector. ”
He also stated, “While our post-Brexit survey of food and drink companies indicates obvious concern about the short-term shocks and uncertainty, exporters expressed a desire to hold their ground in the UK and are seeking assistance in developing the skills required to manage their way through the current difficulties based on insight and feedback from UK customers, buyers and consumers”.
Bord Bia’s strategy to support the industry in this uncertain environment is focused on assisting them maintain their competitiveness, addressing in particular the following specific issues it has articulated while in contact with the organisation:
Provision of regular information updates
Advice on managing volatility
Provision of consumer and market insight
Market development and diversification, including buyer events
Market communications and promotion.
Conscious of possible pressure on the home market from imports from a weaker Sterling, Bord Bia’s market development activities on the Irish market are also being reviewed. An Origin Green public engagement campaign is also scheduled from October to December, to highlight the unique commitments being made by Irish farmers and the wider food industry in sustainability.
Visit www.bordbia.ie/brexit to stay up to date.