Bord Bia: Brexit is catalyst for food and drink firms to do right things

Tara McCarthy, CEO, Bord Bia, and Catherine Day, former secretary general of the European Commission.

BREXIT has been a catalyst for Irish food and drink exporters to review their UK resources, supply chain and currency arrangements, effectively exposing business stress points that could easily have hindered future growth.

The latest Bord Bia Brexit Barometer, unveiled yesterday in Dublin, has shown up multiple key areas where companies can improve. Pooling info gathered by Bord Bia since last year’s UK vote to exit the EU, it contains data from 139 food and drink companies trading in the UK, with up to 15,000 people participating in over 350 hours of analysis.

“Irish companies are seeing that there are still opportunities in the UK,” said Tara McCarthy, Bord Bia chief executive. “We are not looking to abandon the UK, but we are looking at how Irish companies access the UK market.

“Everything that we are recommending companies to do works outside of the context of Brexit. We have gathered a lot of data since the UK’s Brexit vote, but we are not seeing this just as a reaction to Brexit.

“We are saying that Brexit is the catalyst to do the right things for your business. For instance, 64% of our clients say that they are sensitive to any delay in lead time. Mushrooms, for instance, have only seven days of shelf life, so any delay in a port is a big issue.

“Some 88% say their business model is very dependent on low supply chain costs. And 68% say that they are unsure if their supply chain partners are Brexit-ready. We’re helping companies look at these and other pressure points.”

Tara McCarthy said Bord Bia is to use all of the data gathered to create a best-in-class business model for Irish food and drink companies. With a working title of The Bord Bia Way, the model will outline a stage-gated process that will help companies improve their export performance in areas such as supply chain, route to market, in situ UK resources, along with parameters on trade, talent and currency management.

“From the moment last year when the British public voted to exit the EU, the world awoke and asked itself ‘what are we going to do about currency volatility?’. Understanding currency management is a key piece in any business plan; our clients said they would be ‘severely challenged’ if the euro were to stay at 90p [it was at 87p yesterday].

“Outside of that then are understanding your route to market, your supply chain, customs and non-tariff channels. While 85% of our clients say that their main competitors are from the UK, only 64% have a dedicated resource in the UK, and just 39% have a dedicated strategy for the market.”

Up to 80% of companies have not considered the VAT and cashflow implications of Brexit, while 46% have limited on no knowledge of the regulatory requirements involved in exporting to non-EU countries.

Bord Bia is working with its food and drink clients to develop the model for The Bord Bia Way. The model will be tightened in September, due for launch next January. It will house the best-in-class business model, along with key elements of programmes such as Origin Green and other Bord Bia platforms which have helped build an unique platform for Irish food and drink exports.

To date, since the Brexit vote, the Department of Agriculture has given Bord Bia a €4m funding top-up to help Irish food and drink exporters navigate their way through future challenges. The sector remains uniquely exposed to the still very uncertain outcomes that will result from EU-UK breakup talks. 

By the time The Bord Bia Way is introduced next January, people may have a clearer view on business life post-Brexit. The new ‘route to market’ toolkit will bring together inputs from Ibec, Enterprise Ireland and all of the country’s leading food and drink companies, several of whom are global market leaders. 

Similarly, for yesterday’s event to roll out the latest Brexit Barometer findings, Bord Bia was also accompanied by many of the country’s leading food and drink stakeholders.

As well as Tara McCarthy’s central speech on the latest Barometer and summary of the top risks facing the industry, the event featured inputs from: Michael Carey, chairman, Bord Bia; Catherine Day, former secretary general of the European Commission; James Walton, chief economist, IGD; Aidan O’Driscoll, secretary general, Department of Agriculture, Food and the Marine; Alison Cowzer, marketing and innovation director, East Coast Bakehouse; Jim Woulfe, CEO, Dairygold; Dean Attwell, CEO and co-founder, Oaklands; Michael Colgan, head of Brexit Unit, Revenue; and Padraig McEneaney, CEO, Celtic Pure.

“The UK is by far our largest food and drink export market, worth over €4bn in 2016, and while our trading relationship predates the EU and the European Single Market, it has flourished to an exceptional degree within the framework of both,” said Tara McCarthy.

“This trade relationship is very much a two-way street — Ireland is also the UK’s most important food and drink export market, with imports from our nearest neighbour valued around €3.8bn last year. 

“While geographical proximity and a finely matched profile of supply and demand underpin this relationship, so too do shared cultural values and complementary worldviews: we are uniquely well suited to support and meet each other’s food needs.

“It is against this backdrop that Brexit — particularly the variant that puts the UK not only outside the EU but also the European Economic Area and the Customs Union — presents itself as a deep and unparalleled challenge.”

www.bordbia.ie


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