Mr. Philip Carroll:

I do not think anyone doubts that the meat sector is by far the most exposed sector by a no-deal Brexit. It is exposed by Brexit in any case but the fundamental problem that we will face from a no-deal Brexit is a tariff wall. That will be absolutely massive and substantial. We have no line of sight on what that is likely to be. We know, for example, that the UK produced a tariff schedule last year and a further tariff schedule this year. The one this year is more acute and more damaging than the one produced last year. Those tariffs are highest in the meat sector. To give any indication of what would happen in the marketplace on 1 January would be crystal-ball gazing without knowing the what the circumstances of the market will be.

If one looks at where we export, the UK market is our biggest market by far compared with any other single market in the world. The reason is because it is close and because it pays the best prices in the market and has significant demand at retail level and at food service level. The volume that goes in is 47% to 49% of total volume and total value of exports in any given year, approximately €1.7 billion or €1.8 million in value annually. Beyond that, the largest proportion of our products is going to the continental market. Approximately 44% is going into that market, that is the larger consumer countries, such as France, Germany, Italy and some of the Nordic states taking a significant slice of that. Internationally, the market that we were really looking to was the Chinese market and it is now closed, which is a problem. A number of different factors are converging.

On the measures we have put in place, any company in our sector is Brexit prepared insofar as that is possible, but we cannot be prepared for a no-deal Brexit because that is the existential crisis. In that scenario a massive value, around 70% of the market value, will be sucked out through tariffs. The product will be shifted out of the market and given to the exchequers of the UK and Europe. We are suggesting that we need a mechanism that in some way draws that in so that the sector is supported. What we really want is to retain our market share in the UK. If we do not, the diversification is not available to us at this time to shift the product into other markets. If we do have to shift it in volume terms, we could also cause some degree of chaos, certainly disturbance, in the other largest segment of the market, namely the UK. We face a problem in that regard. We need a tariff mechanism that rebates the tariff that comes to the Exchequer back into the marketplace, that maintains our competitiveness in the UK market and maintains the equilibrium that we currently have in the market. I understand our position with the Government. We have spoke to the Government on this time and again, and have been talking about it since 2016. We understand that until the negotiations are finalised, there cannot be a clear line of sight as to the type of support mechanisms that it might want to make available. There are two significant funds available. One is the national Brexit and Covid fund of €3.4 billion, which is available between now and 2024 and the more significant fund is the European Commission Brexit adjustment fund of €5 billion. They are the mechanisms, as well as the tariffs, that come into the exchequers, which can reverse the revenue back into the marketplace to support us for the period it will take for the market to reach its normal equilibrium. The only other way that will happen is if there is some sharing of the cost of the tariff, that is, that there is some price elasticity in the UK market such that there will be an increase in that value. It must be borne in mind, however, that if there are tariffs there is also competition. The South Americans who are exporting, and doing so competitively, at the high tariff rate that currently faces them in putting product into Europe, they will get an immediate competitive bounce from Brexit because the UK tariff is somewhat lower than the European tariff. They will be even more competitive in the UK market, and they are ready and prepared to take a slice of that market. I cannot tell the Deputy with any degree of certainty what the market profile will be in January 2021.

He asked one other question that I would like to answer, which we repeatedly answered at the Covid committee hearings. The answer was 2% in respect of workers who were employed through agencies. Our members' view is that 2% should be heading towards zero.