Premium prices won’t cushion Irish suppliers from Brexit
Irish food promotion agency Bord Bia has warned there are “no upsides” to Brexit for the UK’s closest food and drink trading partner.
Henry Horkan, trade marketing specialist at Bord Bia’s London office, told FFD speciality producers in Ireland were just as vulnerable as major commodity suppliers when it came to exporting to Britain – their biggest international market – with exchange rates providing the most immediate threat.
“There are no upsides in this for us,” Horkan said. “Every sector is affected.”
While premium producers might be “slightly more insulated” from currency fluctuations than commodity meat and dairy suppliers, their small size leaves them more more vulnerable financially and in their ability to manage overseas relationships.
The UK accounts for around 37% of Irish food exports, worth over €4bn a year. The devalution of the pound against the euro became a significant challenge within 48 hours of last June’s referendum result, Horkan said. “Previously, a lot of exporters just went with the vagaries of the market, thinking it would just even out.”
But trade body Food & Drink Industry Ireland has pointed out that the sudden “currency shock” last summer was structural, not cyclical. “Brexit means the current sterling weakness is different from the normal exchange rate cycle and things could get much worse,” it said in a recent report.
A Bord Bia survey of food companies of all sizes had also shown “an awful lot of uncertainty about what the regulatory framework might be, and what customs tariffs they might face”, Horkan said.
He was speaking to FFD after Bord Bia‘s annual five-day Bloom garden and food festival in Dublin in early June – a major showcase for the county’s speciality food sector to both consumers and business. Over 100 producers and brands exhibited at the Phoenix Park event, including around 70 small producers.
Senior buyers from Sourced Market, Dean & Deluca and Selfridges and UK distributors Buckley & Beale and Cotswold Fayre were among a trade contingent invited to this year’s show.
US-based high-end food store Dean & Deluca is due to open its first British outlet in London in August. Speaking to FFD at Bloom, UK head John Barton said: “We’re an international business and we have to have international products, so we’re prepared to take a hit [on price] for now. But longer-term we’ll have to see what happens and take a view.”
- Images from the food hall at Bloom 2017