| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax 2008

Climate Change Reports

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Irish Last Updated: Jan 14, 2010 - 7:06:22 AM


Irish food and drink exports fell 12% in 2009 to €7bn - - accounting for 4.5% of total exports from Ireland; Bord Bia predicts some recovery in 2010
By Finfacts Team
Jan 13, 2010 - 11:42:01 AM

Email this article
 Printer friendly page

Bord Bia, the Irish State foods and drinks export promotion agency, says in its Export Performance and Prospects report launched today, that  the value of Irish food and drink exports fell by 12 percent in 2009, or by just under €1 billion, to stand at €7.12 billion. The agency predicts some recovery in 2010. The sector exports last year, accounted for 4.5% of total Irish exports.

Bord Bia said a sustained decline in the value of sterling combined with the economic downturn and severe difficulties in the global dairy market created unprecedented challenges for Irish food and drink exporters in 2009.

The agency said there are indications however that export values are now beginning to stabilise and Bord Bia predicts some recovery in the year ahead. “The prospects for 2010 point to a return to growth for Ireland’s food sector”, according to Dan Browne, Chairman, Bord Bia. “The potential for stronger export revenues from the key dairy and meat sectors, and investments by prepared food companies to broaden their market presence on the Continent, will help exports as 2010 progresses. However, developments in sterling and consumer sentiment remain critical.”

The decline in sterling and price deflation in the marketplace were responsible for the majority of the reduction in export revenues in 2009. “The underlying performance of the industry, reflected in an estimated volume decline of just 3 percent, was impressive when set against these challenges,” according to Aidan Cotter, Chief Executive, Bord Bia. “Sterling remains the single biggest issue for the industry," he said, adding that, “in 2009, it is estimated the depreciation of sterling reduced the value of exports to the UK by some €400 million.”

Bord Bia says the agriculture and food industry plays an important role in the Irish economy and remains its largest indigenous sector accounting for almost 9 percent of employment. As much as 65 percent of manufacturing exports by Irish-owned firms are estimated to consist of food and drink.

The agency said the long-term outlook for the sector, with its high export orientation, remains positive. Due to an expanding world population and evolving demographics, the world will need to produce over 40 percent more food by 2030 and some 70 percent more by 2050. It will have to do so from fixed resources while minimising its impact on the environment.

However, as it seeks to avail of emerging opportunities, the challenge for the industry to improve competitiveness while broadening its export reach, remains a formidable one. Bord Bia says Ireland’s uniqueness within the Eurozone, sharing a land border with the sterling area, has compounded the industry’s difficulties on its domestic market. At the same time, it must compete with UK-based exporters as it seeks to build share elsewhere within the euro area.

Bord Bia said the UK remained Ireland’s principal export destination in 2009 with sales valued at just under €3.1 billion, a decrease of 15 percent compared to 2008 figures. Despite this, the market still accounted for 44 percent of Ireland’s food and drink exports although its share of trade came under pressure as the year progressed, dropping from 48 percent in January to approximately 43 percent by late 2009.

The share of exports destined for other EU markets increased to 34 percent in 2009, from 32 percent in 2008, helped by a higher share of beef exports destined for the Continent, together with a stronger focus on the region by prepared foods manufacturers. The value of trade to international markets was adversely affected for much of the year by the weaker global dairy market.

Exporters focusing on efficiencies, but concern over sterling remains

The agency said Irish food companies have adopted a range of measures to defend their market positions in the face of the economic downturn, according to a recent Bord Bia survey. Measures have included reducing non-staff costs (68 percent of firms); reducing staff numbers (36 percent but rising to over 70 percent among the largest firms); discontinuing some product lines (35 percent), and reducing expenditures on business development and sales (38 percent) and new product development (28 percent).

Eight out of every ten exporters report difficulties in securing price increases in the UK market to compensate for the decline in sterling. As a result, one in every two firms confirmed they have withdrawn from customers that are no longer profitable, while changing their focus to less price sensitive channels and customers.

Nine out of every ten exporters say that the changes they have made will enable them to maintain their business situation in the UK should sterling remain at 90p over the next six months or so. However, if sterling were to remain at this level indefinitely, having fallen by 30 percent over the last two years, only seven out of ten firms believe they could continue to sustain their business situation. Furthermore, only one in every two believes they could maintain business levels should sterling depreciate further to between 95p and 100p, with the number dropping off to one in three at a rate between 105p and 110p.

Export Performance and Prospects report (the report should be accessible from the Bord Bia homepage on Wednesday).

Finfacts Comment: We have highlighted how Germany increased its food and drinks export 15% in 2008, making it a net exporter in the sector for the first time in recent decades while Ireland's exports fell.

We have also said that the Irish dairy sector is fragmented; it invests significantly less than its major competitors in terms of capital investment and R&D and focuses on low value-added products.

We compare poorly in exporting compared with a comparable country New Zealand and we have very few international consumer brands:

SEE Finfacts article, Dec 2009: The challenge of creating 160,000 new Irish jobs

Related Articles
Related Articles


© Copyright 2009 by Finfacts.com

Top of Page

Irish
Latest Headlines
Ryanair revises up full-year profit guidance
AIB bank profitable in third quarter
Ryanair announces half-year profits up 32% to €795m
Ryanair benefits from improved customer service
Ryanair to buy 100 new Boeing 737 MAX 200
Finfacts server migration Thursday
State-owned Allied Irish Banks reports H1 2014 profit as bad loan charges plunge
Ryanair reports profit in its financial first quarter soared 152%
UK firm opens van dealership in Dublin
Ryanair reports 8% fall in full-year profit; US services to commence in 2019
Global Financial Centres Index: New York overtakes London; Dublin slips to 66 of 83 cities
Bank of Ireland reports “significant” improvement in 2013 results
Sale process of IBRC UK projects Rock and Salt completed
CRH says 2014 will be year of profit growth after reporting 2013 loss
Ryanair reports third-quarter loss
Irish Water says it saved €100m in setup costs
RSA Insurance fires two Irish executives for large loss/ accounting irregularities
Bank of Ireland will have to raise provisions by €1.4bn; AIB says it's "well capitalised"
CRH reports slightly improved third quarter
Central Bank says ownership of Newbridge Credit Union transferred to permanent tsb
Ryanair reports H1 profits rose by 1% to €602m
Dublin Web Summit: Irish Stock Exchange and NASDAQ OMX announce dual listing plan
Irish pension managed funds returned to growth during September
Dan O’Brien resigns as economics editor of The Irish Times
Central Bank says no action required on Anglo tapes revelations
Ryanair flew 9m passengers and Aer Lingus carried 1.1m in August
UK Competition Commission says Ryanair must cut Aer Lingus stake to 5%
CRH reports H1 2013 revenue dip and loss
Vodafone refunded UK after discovery of Irish tax haven deal
RBS reports half year profit; Ulster Bank posts reduced loss
Bank of Ireland cuts pretax losses in HI 2013 to €504m
Irish State-owned Allied Irish Banks reports losses of €758m in H1 2013
Service Announcement
Irish managed pension funds declined in June
VHI reports 2012 surplus of €54.3m; Health insurance made loss
Ex- Elan director says management / board "not competent to run a business"
Aer Lingus to put €140m in employees pensions fund; Ryanair apoplectic
Wednesday Newspaper Review - Irish Business News and International Stories - - May 22, 2013
Tuesday Newspaper Review - Irish Business News and International Stories - - May 21, 2013
Ryanair, Europe’s biggest low cost carrier, announced Monday record annual profits of €569m - - up 13%