Oireachtas Joint and Select Committees
Tuesday, 13 November 2018
Joint Oireachtas Committee on Agriculture, Food and the Marine
Implications of Brexit for Agriculture Sector: Discussion
Ms Maree Gallagher:
Senator Paul Daly asked about raw material supply, particularly in the United Kingdom, and the preparedness of Irish companies which sourced raw material in the United Kingdom. Several of our larger members have the resources to look at their supply chain and identify from where their raw materials are coming. They have done so and perhaps considered alternative sources or the cost implications of continuing with their current suppliers. Since the beginning of September, people have been gearing up in examining and considering their supply chain. There is no doubt that there will be issues regarding the supply chain and raw material supplied from the United Kingdom to Irish manufacturers. Some are seeking alternative supplies in Ireland and on the Continent, but our concern is that it could lead to increased costs.
The Senator also asked about contingency plans on the Continent and referred to contingency planning here. The Government, businesses and business organisations have been doing a lot of work to prepare companies and inform them of the potential challenges. Some contingency plans have been made on the Continent, but other issues are of more concern there and focused on more. Brexit is not as much of a concern there because the United Kingdom is not as significant a market for continental businesses as it is for Irish firms. However, in recent weeks, as we get closer to the Brexit end game, there has been more of a focus on how it may affect continental markets. Mr. McKeever has referred to anecdotal evidence that companies on the Continent are considering where they source their ingredients. There is no doubt that companies on the Continent will be looking for opportunities to become more competitive and may choose to source locally rather than from Ireland or the United Kingdom. Bord Bia and other agencies are doing much work to ensure there is a clear distinction between Irish and UK product. Contingency planning on the Continent for Brexit, particularly in the agrifood area, is significantly behind ours. It is being considered and firms are aware of it, but they are not as prepared as we are.
Senator Paul Daly referred to opportunities arising from Brexit. We would love to say there will be many opportunities. Although there are opportunities, they are not very obvious. The Senator asked whether our proximity and lower transport costs to the United Kingdom would give Irish firms exporting to the United Kingdom or British firms selling into Ireland a slight competitive advantage over other EU producers, even in a scenario where tariffs were imposed. We consider the area of innovation to offer the most opportunities to make Irish industry more competitive. I will address its state of readiness and preparedness, but there is no doubt that the United Kingdom is considering how it will become competitive on the global stage post-Brexit. Papers on attracting investment in biopharma and innovative food products and food supplements and such areas have been produced there. Firms in the United Kingdom will consider how to become competitive. We have anecdotal evidence that the idea that British firms will be able to shed the regulatory chains of the European Union and throw the rulebook out the window is being considered behind closed doors. Ireland and Irish companies need to look at that issue and be in a position to compete and use our proximity to the United Kingdom. Although Brexit is considered to be a negative development, we need to see where the opportunities are because we are going to be feeding our friends and neighbours in the United Kingdom. That is what we want to do. There is no doubt that we will be reliant on imports from the United Kingdom. Our members hope to have as close a relationship as possible with the United Kingdom post-Brexit.
Senator Lombard asked whether the United Kingdom was as prepared as we were. Mr. McKeever referenced the conference he addressed last week. Our sense is that the British Government has not done as much work as the Irish Government in planning for Brexit and a potential no deal Brexit.
I will ask Mr. Lynam to speak a little about the loan and the Government supports. In terms of a business scenario, while we have been discussing Brexit and supply chain issues with members of our agrifood committee for the past two years or so, and also what we should be saying to this committee and to the Government in the context of how we can support the trade, we have seen, perhaps, less engagement on the UK side and less awareness of some of the issues. However, that has changed in recent weeks. I spoke to one of our members this morning who informed me that his big customers in the UK have suddenly begun to send questionnaires asking what his plans are and how he proposes to deal with tariffs and ensure that he can continue to supply them. That has not happened within the food sector until the very recent past.