Brexit has triggered a major decline in food trade between Ireland and the UK, according to a report from the Central Statistics Office (CSO).
The study – Food and Agriculture: A Value Chain Analysis – found exports of food and drink products to Britain fell by 35 per cent from €641 million to €418 million in the first two months of 2021 compared with the same period in 2018.
The CSO noted that while sales to seven of Ireland’s 10 largest food and drink markets actually went up during the period, the decline in exports to Britain was greater, causing a decline in total food and drink exports.
Market
Britain is still Ireland’s largest food and drink market but its share of exports has declined. It accounted for 23 per cent of total exports in January and February this year, down from 33 per cent in 2018.
The figures show, however, that exports of food and drink products to Northern Ireland increased during the two-month period, suggesting more firms here may be using the North as a route to export into the British market.
The decline in food exports to Britain may also reflect the impact of stockpiling in the lead-up to the UK’s official departure from the EU at the start of the year.
The CSO’s report recorded an even bigger Brexit hit to imports from Britain.
It found that food and drink imports from Britain to the Republic fell by almost two thirds (64 per cent), from €523 million to €188 million, in January and February this year compared with the same months in 2018.
The CSO’s report found that food and drink production is worth nearly €26 billion a year to the Irish economy.
It suggested that Irish-owned firms produce €9.8 billion of the €25.7 billion total, while €15.9 billion was produced by foreign-owned enterprises.
The snapshot of the food and drink industry – using 2018 data – also highlighted the sector’s reliance on EU subsidies. It found that almost half of farm profits came from subsidies.
Output
The largest output from Irish-owned food producing companies was dairy products at €3.4 billion, which is almost a third of domestic firms’ production of food and drink.
Commenting on the results, CSO statistician Michael Connolly said: "The initial impact of Brexit on this value chain is very evident in the analysis presented today.
“The importance of the British market as a destination for exports of food and drink companies and as a source of food and drink imports for the Irish retail sector is clear. Although the Irish food and drink value chain is highly globalised, there is still a major concentration of activity with Great Britain, accounting for 23 per cent of exports of these products in January- February 2021, down from a concentration of 33 per cent in January-February 2018.
“As more data becomes available later in the year, it will become clearer as to whether this is an initial Brexit shock, or if the Irish food and drink value chain is truly moving away from its dependence on Great Britain.”
