Closure of McDonald's is a 'big blow' for beef sector

Closure of McDonald's is a 'big blow' for beef sector

McDonald’s closure here and in Britain could be devestate farmers

The Irish Famers’ Association has described the McDonald’s decision to close all its restaurants here as a “big blow” to the beef sector.

The company said it became clear last weekend that maintaining safe social distancing whilst operating busy takeaway and drive-thru restaurants in Britain and Ireland had become increasingly difficult.

McDonald’s is the largest purchaser of Irish beef by volume every year, buying 40,000 tonnes of beef which is then exported to other European markets.

One in five hamburgers sold in McDonald’s in Europe is of Irish origin.

The company is still operating in some countries by shutting off its closed seating areas and instead shifting focus to drive-thru, walk-in take-out, and McDelivery options.

McDonald’s UK & Ireland chief executive Paul Pomroy said its restaurants had been providing hundreds of thousands of free drinks to frontline health and social workers and emergency services personnel.

But they could only continue to operate while it was safe for its staff, and together with their franchisees, it decided to temporarily close.

He added that it will still work closely with community groups across the UK and Ireland to distribute food from its restaurants to those most in need.

For the farming and food industries, the McDonald’s closure may be the tip of the iceberg, with the fishing industry already under pressure.

Agriculture Minister Michael Creed, whose brief includes the marine sector, said: “It is very clear that, as with many other sectors, the fisheries sector is facing very difficult times, as its traditional markets both in Asia and now in Europe have been effectively closed.

“The bad weather earlier in the year has resulted in lower than normal catches and therefore both the crew and vessel owners were already in a disadvantaged position.”

Fishing boats tied up in harbours is an obvious sign of the Covid-19 impact on the food industry. But with 80%-90% of our beef and dairy products for export, there may be huge, less obvious impacts.

Not alone has the foodservice industry of which McDonald’s is a high-profile member ground to a halt across the world, increasing trade restrictions are pressuring the food sector.

Border closures and the lack of freight containers (due to delayed return from China) are other damaging trends.

In many cases, where sales of export commodities fall, they can be shifted to production of retail products which are sold through supermarkets.

However, large tonnages of butter and powders may have to go into storage until markets recover. Spread of Covid-19 may also affect production on our farms, and processing.

Milk processing plants in Co Cork are splitting shifts and isolating different work crews and personnel, to safeguard continuity of processing.

Meanwhile, in the drinks industry, large multinationals such as Diageo are expecting potential losses of as much as £200m (€215m) due to reduced out-of-home consumption in growing Asian markets, and the effect of Covid-19 on global travel retail.

Mr Creed has asked EU agriculture commissioner Janusz Wojciechowski to ensure that the full range of market supports available under the Common Market Organisation Regulation are available for deployment in response to any emerging market disturbance. He is likely to repeat that request in Thursday’s EU Agriculture Council video-conference meeting.

He said he has asked the heads of agri-lending in the main banks to support and work with their customers through the challenging period ahead.

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