News Q&A: Bord Bia
Bord Bia tries to project likely outcomes of UK exiting EU.
Exporters of agri-food with a focus on the UK market have been turning to Bord Bia and other state agencies for guidance on how best to equip themselves for life post-Brexit.
In this publication last week, we carried the first half of a series of answers which Bord Bia issued in response to the main questions being posed by their client companies.
This week, we run the second half of those responses.
Most of these answers fed out of a survey and consultation with Bord Bia’s member companies, who are primarily made up of the country’s food and drink exporters.
The answers are part of an ongoing process in which Bord Bia will keep its partners updated with market information, and with the latest advice from industry experts.
This commitment was mapped out at the recent Bord Bia-hosted Brexit briefing in Dublin for some 180 Irish food and drink exporters, with inputs from UK food retail market experts.
Participants shared views on the post-Brexit trading landscape, and outlined Bord Bia’s measures for supporting companies.
“Britain takes 41% of our food and drink exports, valued at €4.4bn,” said Bord Bia CEO Aidan Cotter at the briefing.
“If we can’t resolve the uncertainty, and clearly we can’t, our hope is that at least we can now begin to learn how we can deal with it and live with it. Our ongoing close contact with our clients will inform our future supports for the sector.”
Will there be lots of extra paperwork and costs involved in trading with the UK?
Industry experts have predicted a rise in costs, once the UK has left the EU. The UK will become a non-EU country, with expected additional regulatory and administrative business transaction costs.
Some experts have informally estimated a 5% rise in trade costs between the UK and its trading partners, however the final costs will only become clear after the negotiation period.
How quickly will the current terms of trade be dismantled and new structures put in place?
Negotiations for the UK to exit the EU cannot commence until Article 50 of the Lisbon Treaty is invoked with the UK prime minister, formally notifying the European Council of the UK’s intention to leave. It is not clear when this will happen.
While it remains to be confirmed, it is likely that negotiations on the UK’s future relationship with the EU, including in terms of trade, would take place in parallel with the exit negotiations. These negotiations are likely to take several years.
While consideration of charting a path forward will begin immediately, the negotiations themselves will not formally commence for some time. The negotiations will be between the UK and the remaining 27 members of the EU.
Will the EU regulations on food products still apply to products exported to the UK?
At present, the UK is still part of the EU, and therefore there are no changes to existing EU regulations on supplying food products to the UK. The UK will need to trigger Article 50 to begin exit negotiations.
Will Britain remain a major market for Irish food and drink exports?
Over the last number of years many Irish companies consciously chose to reduce their over-reliance on the UK as their main export market, and have looked to diversify their reach into new markets.
The United Kingdom imports almost 40% of its food products. Ireland is the main export market for UK food and drink products, accounting for almost one fifth of trade at €3.1bn in 2015.
In turn, the UK is the largest market for Irish food and drink. It is the largest single market for Irish food, accounting for 41% of the total Irish exports, an estimated €4.6bn in 2015.
The long-term, two-way trade links between Ireland and the UK are extensive.
Bord Bia, through our London office, is maintaining a close dialogue with key trading partners to reassure them of the importance of the UK market to Irish food and drink companies and our continued commitment to the UK market during this period of uncertainty.
What other potential emerging markets should Irish food and drink exporters focus on?
Exports to other EU countries formed 31% of total exports, or €3.4bn, last year, due to the growth of markets such as the Netherlands, Spain, and Poland.
Exports to International markets accounted for €3bn, or 28%, in 2015. Irish food and drink is sold in more than 175 markets worldwide.
In addition to the support Bord Bia will provide to companies currently exporting to the UK, we will continue our market diversification strategy to broaden the opportunities for Irish companies to export to EU and International markets.
New Bord Bia offices in Singapore and Warsaw
This summer, Bord Bia will open new office locations in Singapore and Warsaw to complement the existing footprint of 11 offices across the UK, Europe, North America, Middle East and Asia.
Bord Bia is also working with the Department of Agriculture, Food and the Marine on a number of Trade Missions this year with a view to widening the customer base internationally for Irish Food.
These activities form part of an existing diversification and new markets strategy.
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