Joe Gill: Irish food industry faces up to coronavirus threat

Joe Gill: Irish food industry faces up to coronavirus threat

Both African Swine Fever and the coronavirus are causing huge disturbances in the global economy with the effects being especially acute in the food industry.

Both the fever and virus are attributable to shortcomings in food supply chains in particular, and they shine a light on the importance of safe production and distribution systems related to food consumed by humans.

This is an issue which will only become more important as globalisation continues to evolve and peoples increasingly move across borders amid a world population that is growing in scale. 

Against this background those countries and industries that have a proven ability to produce, store and distribute food safely over large distances will have a major competitive advantage.

This is where Ireland can play an invaluable role in the coming years, not least in China which has a voracious appetite for safe sustainable food as its economy continues to expand and its middle class grows exponentially.

Any review of the Irish food industry finds a sector that has learned the hard way how to produce and deliver food safely to consumers across the world. 

The visceral memory of the 19th-century famine may explain part of that capability but it is more recent experiences that have honed an ability coveted by many nations worldwide.

BSE in the UK, tuberculosis, the horsemeat scandal and the remorseless demands of large retail and catering companies have cajoled and hustled the Irish agri-food industry to develop a strategy in its eco-system built around transparency and traceability. 

Anyone who has an exposure to Irish farming knows that nowadays every animal birth, death or movement has to be faithfully recorded on an advanced IT system operated by the Department of Agriculture. 

Once farm produce enters the food chain it is subject to rigorous and repeated tests at manufacturing and packaging plants to ensure its safety for consumption. 

That process extends to shipping food to customers around the world for ultimate consumption in homes, restaurants and other commercial premises.

Combined, this knowledge gives the Irish agri-food industry an intangible but highly valued asset that could be unlocked to solve critical challenges across the global food industry.

Nowhere is this more apposite than in China where the importance of a secure food chain has been red-flagged by recent events.

It should be no surprise if Chinese food enterprises, which are among the largest on the globe, come knocking at Irish doors to discuss ways in which they can collaborate with Irish co-ops, the State agencies and companies to embellish food safety standards in China and other Asian markets.

Leveraging this potential is a key task for strategists and policymakers in the Irish public and private food industry. 

We can already see that a focussed effort by China to replace lost pigmeat production due to African Swine Fever has generated enormous demand for Irish pigmeat. 

Indeed, the volume of demand is creating price inflation as traditional buyers scramble for supplies.

That step-change in demand can also apply to other sectors, including seafood, but must also be assessed as an opportunity for the management skillset that resides among Irish food businesses. 

These can be harnessed to accelerate opportunities structured as acquisitions, joint ventures or disposals involving Irish and Chinese enterprises.

Since the foundation of the State, the economy has focussed on expanding first by selling into Britain and afterwards through the US and then the EU. 

These remain key markets despite Brexit and EU-US tensions.

But China is quickly emerging as the largest and fastest-growing economy on the planet. 

Ireland can position itself well to benefit from that new source of demand and the agri-food industry is one of the best places to make rapid progress in that context.

--Joe Gill is director of origination and corporate broking with Goodbody Stockbrokers. His views are personal.

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