Food and drink sector hit by costs
It points out that the sector had consistent output growth since the start of the decade, high levels of productivity compared with competitor economies and a positive trade balance of €3 billion annually. But it says urgent government action is now needed to sustain and develop the industry, which supports 50,000 jobs directly, 60,000 jobs in distribution and the livelihoods of 120,000 farmers.
Food and Drink Industry Ireland or FDII, a business group within IBEC, which published the report, warned that the competitive position of Ireland’s most important and dynamic indigenous sector has been severely damaged by rising business costs and, more recently, the huge depreciation of sterling.
FDII director Paul Kelly said the cost base for the sector is way out of line with competitor economies.
“This is having a huge impact on our export potential and, ultimately, on the investment decisions of Irish food and drink companies,” he said.
Mr Kelly said more than 2,000 jobs have been lost already this year and many thousands more are at risk.
The Government must act urgently to reduce business costs, particularly energy, so that they are in line with and ultimately below the EU average, he said.
It must also act to redress the major economic disturbance caused by the depreciation of sterling. Central to this is the need to get EU approval to set aside state aid rules and provide grant aid to assist companies put in place productivity enhancing measures.
Mr Kelly said the Government must also introduce a workable export credit scheme with a state-backed guarantee.
The report also calls for the introduction in Ireland of a supermarket ombudsman and a supermarket code of practice as essential in order to protect Irish food suppliers from unfair commercial practices.
