Government too slow in reacting to Brexit – meat factories

While Brexit negotiations are ongoing, Ireland’s meat industry has already felt the impact of Brexit, and the Government is too slow in reacting, Cormac Healy, director of Meat Insudtry Ireland (MII) has said.

Speaking on RTÉ Radio on Friday, he said: “What we don’t want to do is find ourselves, wherever negotiations finish, with a lower market share in the UK market or a significantly weaker sector.

“We have called for additional funding, certainly there’s need for mitigation funding to assist companies in the short-term in terms of dealing with cashflow issues and in the medium-term investment.”

However, Healy said that the Government needs to come forward with that funding and that equally it needs to be working with Brussels to get assistance in this.

“This is a fracture of the single market, the response hasn’t been there. The action needs to happen now.

“We need more feet on the street in terms of delivering market diversification.”

On the UK market, Healy said that the meat industry it is highly reliant on the UK market, 56% of overall meat exports go there.

Sterling

“I would say that since the vote, sterling has actually weakened by 20% against the euro. Most worrying is since the middle of this year, since April, we’ve seen a steady weakening to get to the 92p.

“Now we’re at 92p, it’s unprecedented territory, probably the most difficult trading condition in the last decade with the UK and commentators are pointing towards parity, that’s the real fear we have.

“The UK market is obviously a huge market for us and they have an import demand. With this kind of move in currency, margins become extremely squeezed, while there may have been some benefit from hedging, that is gone now.”

We would see this as not normal market movements, it’s a structural shift between the euro and sterling on foot of a political decision.

“In so far as exports to the UK are challenged, we are now seeing, particularly in the lamb sector, very competitively priced UK product out on our main export markets in terms of France or Benelux countries, because they have that competitive edge.”

Market diversification

On market diversification, Healy said that if it were easy, that Ireland would already be there.

“The UK has been a very good market and it makes huge sense for us to be trading there and have such volumes going to the UK, but diversification takes time and investment.”