Ibec wants substantial portion of €1bn Brexit relief fund to go to food sector 

Food Drink Ireland wants a new State-supported export credit insurance scheme

FDI said the State needs to ensure the country’s “most important indigenous manufacturing sector can control its cost base, whilst also innovating and improving both productivity and sustainability".

Ibec wants a substantial portion of Ireland’s €1bn share of the Brexit Adjustment Reserve (BAR) fund to be invested in the food and drink sector.

The call comes from Food Drink Ireland (FDI), the Ibec division which represents the food industry.

In its pre-budget submission, FDI said the State needs to ensure the country’s “most important indigenous manufacturing sector can control its cost base, whilst also innovating and improving both productivity and sustainability".

It was announced, in June, that Ireland would get the lion’s share of the EU’s agreed €5bn Brexit recovery fund, which targets countries and business sectors most affected by Britain leaving the EU. Germany, France, Belgium, and the Netherlands are also sharing in the fund.

FDI wants a new State-supported export credit insurance scheme. It has costed this at €20m and claims a large part would be used by food and drink exporters.

It also wants €300m to be invested in competitiveness and trade promotion. 

FDI said a mix of state aid supports and funds from the €1bn BAR allocation should be used to pay. 

However, it said “substantial” funding for the sector should come from the BAR.

Keeping the Employment Wage Subsidy Scheme and grant support under review would also help those sectors impacted by Brexit, the Ibec body said. 

In addition, the ‘ready for customs’ grant scheme should be extended and refinanced, it said.

“The food and drink sector is deeply resilient but now faces major disruption to its markets from Brexit, while still contending with the impact of a global pandemic,” said FDI director Paul Kelly.

The EU/UK Trade and Co-operation Agreement has introduced significant additional costs for Irish food and drink companies at each step of production and distribution. 

"In addition to Brexit-related transport and logistics cost hikes, Irish food and drink businesses are also experiencing inflationary pressures across most cost headings due to a combination of macro-external factors which include global and domestic supply chain constraints and raw material inputs as well as Brexit and Covid-19,” he said.

Separately, FDI wants an additional €400m to be set aside in next month’s budget to drive low carbon investment in industry. 

It is also calling on the Government to reduce alcohol excise rates by 7.5%, allow alcohol excise on bad debts to be written off and a new craft cider excise exemption scheme to be introduced.

An amended Employment and Investment Incentive Scheme should be used to enhance support for start-ups in the Irish whiskey and spirits sector, while a revamp of the existing commercial rates exemption scheme should be used to incentivise food business operators and cold storage companies — as occupiers of commercial property — to carry out maintenance, improvements and retrofitting or energy saving investments, it said.

Last year, a third of Irish food and drink exports went to the UK, with Irish food products accounting for seven of the ten most exposed country/food and drink product matches in the EU, according to FDI.

“Ireland needs to maintain our market position in this high value, high quality market that has a substantial food deficit and not relinquish it to global competitors,” it said.