Business group calls for another energy support extension

Food Drink Ireland makes call ahead of upcoming British border controls

One of the supports that Food Drink Ireland is seeking is a deadline extension for the temporary business energy support scheme. Picture: iStock

An industry body has called for energy supports to be extended to ease cost-competitiveness pressures ahead of upcoming British border controls. 

Food Drink Ireland, which is part of lobby group Ibec, said the introduction of border controls on October 31 could increase input costs further.

“The food and drink sector continues to endure during challenging times and faces ongoing costs due to Brexit and more specifically the forthcoming introduction of border controls to our largest export market which is why Food Drink Ireland is calling for the extension of the Government’s two energy support schemes,” said Food Drink Ireland deputy director Jonathan McDade.

These new controls will have implications for all Irish exports to the UK, excluding Northern Ireland. Full customs controls will be introduced for goods moving directly from Ireland into British ports.

To mitigate the cost impact of these controls, one of the energy supports that Food Drink Ireland is seeking is a deadline extension for is the temporary business energy support scheme. However, this was previously extended by two months and is meant to be wound up at the end of this month. 

The €1.3bn scheme was prolonged due to the low uptake among small and medium-sized firms. It is not clear if there will be significant interest to warrant another extension as wholesale energy prices continue to fall from highs recorded last year and pressure mounts for energy providers to transfer these declines to household and business bills.

Meanwhile, the latest quarterly business monitor from Food Drink Ireland shows consumer sentiment continues to grow steadily in the food retail sector.

The volume of retail sales, excluding bars and motor, increased 1% in three-month moving average including March, April, and May, versus the same months last year. The value of sales rose 4.5% over the same period.

However, the lobby group said inflation continues to be an issue, even as inflation cooled to 4.8% last month.

The group also said long-term trends show significant increases in wages, transport costs, and wholesale energy prices compared to three years ago.