Interview with Tara Mc Carthy, Bord Bia CEO

PON: Tara, a good week for the Irish food industry at SIAL China?

TMC: It has been an excellent week. We have had fantastic company engagement and fantastic interest here from the market. As anyone who visits China can see, the scale of this market is huge and you have to come here to believe it. The speed of change, the growth and opportunities that brings are very impressive but it is not without challenges and we are looking to understand the challenges and build our work frames around that.

PON: The focus is on beef at the moment because it is the most recent news but Ireland has been here for some years now in dairy and the pigmeat sector. We have performed well in these?

TMC: We have performed strongly but we have to go with how that market is performing – infant formula has been a huge win for Ireland and it is the majority of our exports. We met with some of the infant formula companies this morning and we will be meeting more of them in the coming couple of days. Obviously the birth rate in China isn’t as high as people had expected with the change to the two-child policy, so that is an area of concern. There have been some good opportunities for Ireland, however, as it is positioned always at a premium level. If you look at pork, obviously it is in a challenging cycle at the minute, and Ireland reflects and reacts to that cycle. Whatever China does impacts on the whole globe and that is something that we have to watch and make sure we have critical mass but also that we have balance in our exposure.

PON: The thing that is particularly interesting is that in the pig sector China produces 96% or 97% of what they consume while in beef they produce about 80% so any growth in consumption will be supplied by imports. That has to bode well for Ireland.

TMC: When you consider that even though they are 96% self-sufficient, they are still the biggest importer of pork so again the scale of opportunities are immense. On beef we are optimistic on imports – there is a forecast that there will be a growth in imports of 100,000t this year alone. Now the next challenge is how Ireland can get a share of this and what is the best balance and the best routes to market. We spent some time over the course of these last few days looking at and discussing with industry our recommendations and that is positioning towards food service and online, finding the right distributors and building an awareness that Ireland is here, building an awareness of the benefit of grass because it is a grain market at present and that is very much dictated by who is ahead of us. The countries that are ahead of us and there are European countries that rumour has it won’t be that far behind us. So the real challenge here is to use the benefits that we have to leverage our European credentials but also as the first EU country to get here, get some key distribution contacts going.

PON: Looking at this through the eyes of your farmer levy payers in Ireland who invest in Bord Bia and have done for decades, can you be confident that the industry will develop the Chinese market in a way that doesn’t devalue it, that doesn’t undermine it? We are going in with a blank page, and historically while Irish factories have a great reputation for producing a good product they also have a reputation for undercutting each other, devaluing the product in the process. Are you sure that won’t happen in China?

TMC: I guess commerce will be commerce, and each of the companies will be working to optimise profits for their shareholders. What Bord Bia can do is create the context for how Ireland is positioned and if you look at what we have worked on in dairy and using Origin Green, our real objective is to achieve premium positioning for Ireland.

We have worked very hard with industry and industry have been working collectively to date on this. We have been having briefings before we came to China two weeks ago, we had a China day where we went into deep research on the usage of beef in China to make sure our companies are informed. When we came to China we had a doing business in China seminar and the feedback we have been getting from the dairy and the meat industry has been very positive on the insights from that market.

The next phase is about connecting the dots and getting the right distributors. We don’t get engaged in pricing individual cuts or in individual negotiations, but what we do get engaged with is building the collateral, building the credentials and the feedback we are getting would imply that that is very positive.

PON: Should you be taking a step further in that chain? Should you be attempting to do what Ornua does in the dairy industry and be that sort of umbrella marketing, selling organisation?

TMC: That’s not our remit. Our remit is very much the market development we are not a commercial semi-state.

PON: Should you be? Should that be looked at in the light of Brexit and all the things that are coming up and facing the industry in the months and years ahead?

TMC: Every opportunity and every idea can be looked at but the roadmap we are currently following doesn’t include a commercial remit. I think the state of Ireland is always concerned about new quangos and different people going outside their remit. We have a strong position that we have created with Origin green and we also have state aid rules and if you look at Ornua they are not a semi-state organisation anymore and the reason is because of EU law – they had to cease being a semi-state. If you want to make sure the Government has a strong influence in positioning, then Bord Bia has to stay being able to walk that very fine line between giving market insight and developing commercial market strategy but staying one step back from the market to allow us maintain that from a state aid perspective.

PON: I suppose we look at this from the perspective of Irish farmers who are our readers and your levy payers and think what is best for them but maybe that is a debate for another day. The bottom line is that you feel China is going to deliver for the Irish beef industry in the same way it has for pigmeat and dairy?

TMC: We believe that there is a huge opportunity ahead of us now it is a case of making sure that we get a win from that by converting access to commerciality and that will take a number of years to do but we are very excited and the farming organisations have came and saw it with their own eyes over the past couple of days. I was speaking with Joe Healy and he too is very impressed with the opportunity. Everyone is very aware of the competition that is in this market but while you say this is a blank sheet for us there are people that have already written on the page ahead of us and what we need to do is create and differentiate a specific niche for Ireland so that we are the go-to country for a specific group of clientele.

PON: Tara Mc Carthy, chief executive of Bord Bia, thank you.