| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy

Finfacts changes from 2015


How to use our RSS feed

Follow Finfacts on Twitter

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.


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


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Global Cost of Living

Irish Tax - Income/Corporate




Content Management by interactivetools.com.

News : Irish Economy Last Updated: Sep 5, 2015 - 1:27 PM

Benchmarking Irish food & drinks industry in 2015 - Part 1
By Michael Hennigan, Finfacts founder and editor
Feb 20, 2015 - 7:34 AM

Email this article
 Printer friendly page

Irish food & drinks exports rose by 5% in 2014 and the end of European Union milk production limits (quotas) on March 31, 2015 is being hailed as a great opportunity for Ireland. Simon Coveney, agriculture minister, has termed it "one of the most significant opportunities for the Irish economy that we’ve seen in many years, in the most important indigenous industry for our economy" and he forecast last November that the post-quota scenario would be “extraordinarily exciting” — Irish ministers love superlatives!

It may well be and the manta that there are 1.3bn people in China can be reassuring or deluding while Kevin Bellamy, the senior dairy analyst at Rabobank, the Dutch bank, who in 2012 highlighted the favourable factors for Ireland, was quoted by Darragh McCullough in the Irish Independent at the end of January: "We're still pessimistic about any improvement in milk prices in Europe before July"

McCullough also reported that "forecasters still predict a below-cost price of 27c/l for Irish dairy farmers in 2015."

Irish food & drinks exports were valued at €10.4bn in 2014 (Irish population 4.6m) compared with €15.4bn from Denmark (5.6m) and €81bn from the Netherlands (16.8m). Surpluses as a ratio of exports were at 34%, 33% and 35% respectively.

The UK accounted for 40% of Irish food and drinks exports in 2014 and in 2013 Ireland and France were the UK’s biggest food and drink export markets by both overall value and value gained, rising by +7% to £3.21bn and +10% to £1. 5bn respectively.

The traditional food and drinks trade surplus with the UK had been narrowing in recent times and effectively evaporated in 2014 despite a weaker euro vs sterling rate in the second half of the year - Bord Bia estimated Irish food and drinks exports at over €4bn in 2014 while Ireland accounted for 24% of UK food and non-alcoholic drinks exports in the year with France in second place at 11%. We used CSO import data for the value of UK alcohol imports.

In recent years Irish officials and industry boosters have been regularly using the claim that Ireland produces food annually that could feed 35m people while there is a target for 50m in 2020. It has become a mantra without the need to cite the basis while the Danes who have a bigger food output than Ireland, claim to produce enough food to feed 30m.

According to European Commission data, the number of Irish farm holdings at 139,900 compares with 42,100 in Denmark and 72,300 in the Netherlands. The larger number of holdings resulted in Common Agricultural Policy (CAP) payments in 2007-2013 to Irish farmers at €11.7bn; €7.7bn to Danish farmers and €7.5bn to Dutch farmers.

Some Irish farmers are in effect getting welfare from Brussels while retaining non-economic farm units. This has a knock-on impact on land sales which in Ireland are very low and result in Irish land prices being amongst the highest in the world. Selling sites for building also boosts income.

The number of Irish annual sales transactions has fallen as low as 0.2% of agricultural land compared with a peak of 2.1% in 1978 and Irish land price is about quadruple French prices.

Focus on Irish food industry's bigger potential than chemicals or high tech — the price of Irish agricultural land is quadruple the level in France.

Dysfunctional development land systems in UK and Ireland - Part 2

This is why talk of a generational opportunity following the end of milk quotas should be treated with caution.

Vegetables and horticultural products (including flowers) accounted for 35% of Dutch primary output of €24bn in 2013; potatoes 7%; fruits 3%; milk 21% and pigs/cattle 20%. Denmark's €11bn was broken down as crops 35%; pigs 29%; milk 17% and cattle 4% while Ireland's €7bn comprised crops 25%; milk 29%; cattle 30% and pigs 7%.

Of employment of about 105,000 in the Agriculture, fisheries and forestry sector, 11,000 people work in fishing and processing and about 1,000 in forestry. The total Irish workforce at end December 2014 was at 2.152m.

Annual exports of seafood are valued at over €500m.

Irish value added was at  €1.9bn; Dutch value added was at  €9bn and Danish value added was at  €3.9bn.

CAP subsidies accounted for 59%, 33% and 16% of 2013 factor income in Ireland, Denmark and Netherlands respectively while since 2005 overall agricultural income fell 17.7% and rose by 82% and 21% respectively.

Falling income and a big reliance on public subsidies is not a positive story for Ireland.

The Dutch economic affairs ministry asked a local think-tank to benchmark the Netherlands against seven other countries for innovation in the agri-food industry and Denmark was selected as the most innovative and the Netherlands got a third rank.

Last year, a University College Dublin study also ranked Denmark as No. 1 and it concluded: "Ireland has a number of truly world class innovative companies, however the problem is there are simply not enough of them and there are too few new innovative companies emerging from which world leading companies could emerge."

According to Invest in Denmark, the inward investment agency, within ingredients for the food industry, Denmark holds a strong global position: 14% of all food ingredients supplied to the global industry come from Denmark.

Food ingredients, such as enzymes, cultures, and proteins are currently the biggest growth segments in the Danish food industry.

The growing global demand is expected to further strengthen the development of Danish strongholds such as bio ingredients, probiotics, sweeteners, proteins and emulsifiers.

Between them, Chr Hansen of Denmark and DuPont, the US company, have an 80% share of the global market for cultures. While DuPont and Novozymes of Denmark are responsible for 75% of global food enzyme sales – important for fresh-keeping bread, full-bodied beer, high-yield juice and many other uses.

Ireland's Kerry Group says it is "the largest and most technologically advanced manufacturer of ingredients & flavours in the world, we supply more than 15,000 ingredients & flavours to many of the world’s biggest names in the food, beverage and pharmaceutical markets."

The numbers directly employed in the food & drinks industry producing final products is about 50,000 in Ireland, 55,000 in Denmark and 125,000 in the Netherlands.

In 2011 in an online debate in the Economist on the importance of manufacturing for growth between Dr Ha-Joon Chang of Cambridge University and Prof Jagdish Bhagwati of Columbia University, the former said:

Take the case of the Netherlands. Unbeknown to most people, it is world's third largest agricultural exporter [now the second after the US - Finfacts], despite having little land (it has the world's fifth highest population density). This has been possible because the Dutch have 'industrialised' agriculture by, for example, deploying hydroponic agriculture (growing plants in water) that uses computer-controlled feeding of high-quality chemicals—something that would not have been possible if the Netherlands did not have some of the world's most advanced chemical and electronics industries. In contrast, despite being the world's second most high-tech exporter (measured by the share of high-tech products in manufactured exports), the Philippines has only $2,000 per person income because it makes those products with other people's technologies."

Food and drink companies in the EU directly employ 4.25m people. "This is the largest EU manufacturing sector for direct employment (15%)," according to FoodDrink Europe, a lobby group.

Ireland: Only 3% of Irish SMEs are active in manufacturing - Part 2

Ireland has 4,000 exporters, Denmark has 30,000

Scotch whisky exports at £3.9bn; Irish whiskey exports at €365m

Ireland 2016: "Best small country in the world" for business? - a FAIL

Chinese investment into Europe at record high; UK on top, Ireland hopes

Irish overseas 'contract manufacturing' mainly tax avoidance

Forty American firms account for two-thirds of Irish exports

Ireland: Jobs in foreign-owned exporting sector in 2014 below 2000 level

Ireland: Government explains how it understates recession job losses

Irish Boom & Bust: Could conventional wisdom be fooled again?

Bord Bia food & drinks statement on 2014

Related Articles

© Copyright 2015 by Finfacts.ie

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March