Food and drink exports fall 6.5% but Bord Bia predicts recovery in sector

IRISH food, drink and horticulture exports declined by 6.5% last year to €8.16 billion, Bord Bia revealed yesterday.

But it also maintained the industry has the potential to boost annual export returns by more than 20% to reach €10bn by 2011.

Bord Bia chairman Dan Browne, speaking in Dublin at the launch of its performance and outlook report, said the agri-food industry is uniquely positioned to actively contribute to a national drive towards securing sustainable economic renewal.

“As Bord Bia sets out its priorities for the period ahead, however, we must recognise that while the industry has an excellent track record of achievement it must overcome significant competitive challenges if it is to successfully grow market share at home and overseas,” he said.

Bord Bia chief executive Aidan Cotter said the challenges facing food, drink and horticulture exports were evident in 2008 with significant currency volatility, shifting shopping patterns and reduced access to credit all impacting on exporters.

“Exports declined during the year by 6.5% to €8.16bn. Yet, the performance of the sector remains impressive considering 43% of our exports are destined for the British market, and that the average depreciation of sterling against the euro amounted to 22%,” he said.

The performance report noted that exchange rate movements also affected exports to destinations outside of Europe, which last year amounted to 24% of the total.

“The best performing sector in 2008 was meat and livestock, up by 2% to €2.58bn. This was due to the value of Irish beef exports increasing by an estimated 7% to reach €1.7bn.

“Recorded pigmeat exports are estimated to have fallen by 2% to €360m as the product recall brought trade to a virtual standstill in December.

“Other areas that performed well included ready prepared meals, luxury chocolate confectionery and seafood,” it said.

The report said a significant easing in dairy prices, falling from their 2007 peak, resulted in export sales dropping back by 5% to €2.2bn. Meanwhile, exports of alcoholic beverages, affected by slower consumer spending and the weakness of the US dollar, declined by 13% to €1.25bn.

The agri-food sector accounted for 10% of Irish exports in 2007 compared with 7% in 2002 and represented 8% of the national workforce.

Output reached almost €15bn in 2007 having expanded by more than 22% compared with 2006.

FDII head of consumer food Shane Dempsey said: “The industry is currently under serious pressure from production costs and price pressures, with an estimated 10,000-12,000 jobs within the sector currently under threat.”