Bord Bia survey reveals pressures on Irish food producers

IRISH food producers have faced relentless pressures in the home market for the past five years, according to a new Bord Bia survey.

It has reached the situation where failure to regain costs has become a greater problem in the domestic than in the British market regarded as one of the toughest anywhere.

“Over the last year, the trading environment on the domestic market would appear to have deteriorated compared with export markets”, according to Aidan Cotter.

“Some 70% of respondents to a December 2006 survey by Bord Bia cited price deflation in the Irish market as having a ‘high’ or ‘very high’ impact on their business in 2007, as against 54% in relation to the UK market,” he said.

Similarly, the strength/intensity of competition was expected to have a high or very high impact by 77% of respondents in relation to the Irish market in contrast to just 54% in relation to the UK market, he said.

Despite that significant challenge Mr Cotter said the focus of Irish firms in facing up to the challenges of the global food market was impressive.

That was reflected through an increased focus on innovation and the growing market share being achieved in target markets including Asia.

Last year, which delivered a record export performance from the Irish food and drinks sector, produced a few noteworthy features.

The importance of brands in under pinning the food and drinks sector is highlighted by the fact that the top two performing grocery products in the British retail sector last year were Irish. These were Goodfellas pizza and Magners cider in that order.

That augured well for the 120 Irish food and drinks companies who continue to build their commitment to pursuing brands that have consumer appeal.

Also during the year exports to Asia expected to hit €300m for the first time driven in particular by growth in sales to China.

“The industry is cleary on track to achieve a doubling of exports, as set out in the Government’s strategy for the region by 2009”, he said.

Bord Bia’s survey of Irish food and drink companies showed how innovation conscious Irish firms have become, he said.

Last year it 30% of sales emerged from new or reformulated products, up from 27% in 2005. And up to 68% of companies have plans to produce new products over the next 12 months, with 49% saying they will reformulate existing product lines, he said.