The dependence of Ireland’s agri-food sector on the UK export market is significantly greater than that of the economy as a whole and has already been impacted by the UK Brexit decision with the value of food and drink exports to the UK falling by over €500m in 2016 as a result of the drop in the value of Sterling against the €uro, states the Government’s just-published position paper on Brexit.
This sets out its strategy for negotiations between the EU and UK on its departure from the EU and includes exploring EU measures which might be of assistance to Ireland in softening the fallout of Brexit on specific Irish businesses and economic sectors.
“The position paper confirms the deeply flawed nature of the proposals in the Public Health (Alcohol) Bill,” pointed out Ross Mac Mathúna of the Alcohol Beverage Federation of Ireland, the association which represents alcohol manufacturers and suppliers in Ireland, in response today to the publication of the Government’s position paper.
“The combination of Brexit and stringent measures around advertising, Ireland-specific labels, Minimum Unit Pricing and structural separation of retail outlets, as laid down in the Public Health (Alcohol) Bill, will create the perfect storm for the drinks sector,” he predicted, “In an already precarious situation, this is not a time for scoring own goals. A collective endeavour will be required if the Irish drinks industry and wider agri-food sector is to survive and thrive in the face of Brexit’s considerable challenges. I call on the Government to engage with industry to strike a balance between tackling harmful drinking and preserving jobs and local business.”
According to the position paper the UK has clearly stated that one of its objectives on leaving the EU will be to have the ability to negotiate trade agreements with other countries outside the EU. This could present additional competitiveness challenges for Ireland’s traditional UK market suppliers.
Sterling’s devaluation also presents competitiveness challenges for Ireland’s strong tourism sector as a destination, states the position paper which recognises that the decline in the pound will see Ireland face increased competition for outbound UK tourists and UK regions like Scotland will become competitors in price-sensitive third-country source markets.
“Since the Brexit vote last June, the food and drink sector in Ireland has faced enormous challenges in the short term including the fallout of a devaluation of Sterling and a surge in cross-border shopping,” stated Ross Mac Mathúna, “The proposals in the Bill will exacerbate pressure on the drinks and wider hospitality sector which employs over 200,000 people, generating €4 billion in wages annually.”