Mr. Paul Kelly:

I thank the Chairman and members for the opportunity to make this presentation today. We are from Food and Drink Industry Ireland, FDII, a business sector within IBEC, representing approximately 150 food and beverage companies across meat, dairy, consumer foods and beverages.

I am the director of FDII and am joined by my colleagues Mr. Michael Barry, director of the Dairy Industries Association on my right and, on my left, by Mr. Shane Dempsey, head of consumer foods in FDII, and Mr. Cormac Healy, director of Meat Industry Ireland. I will make the initial part of the presentation, my colleagues will each take a couple of slides and I will speak on the concluding slide.

Let me give the background to the Irish agrifood sector. People are familiar with the size and importance of this sector, but it is worth reiterating that one in eight jobs in the economy is linked to food production, indirectly associated jobs or food processing. It is as important to the Irish economy as the car industry is to Germany. There are approximately 690 enterprises, the vast majority of which are small and medium-sized in the SME category, as is the case across most of Europe. However, the number of large companies in this sector at 6% is above the European average for large companies of 1%. This reflects on our relatively small domestic market. If companies are going to grow they need to export. A successful export company leads to scale. We have rich resources in terms of food production and have a significant number of world class large companies and a very large cohort of world class SMEs.

There are two distinct markets. Many companies will serve both markets but the issues will differ between the export and the domestic focus. We supply the majority of Ireland's €14 billion grocery sector. We have also exceeded for the first time in 2012 the €9 billion worth of exports, which accounts for about 30% of net foreign earning. It has a major link to the economy with €11.5 billion of purchases in the domestic economy. We regularly make the point that the headline numbers, either on the size and scale of the domestic grocery market or the export figures, are impressive in their own right.

However, when one examines the linkages to the rest of the economy - and by that I mean everything from farming and logistics, through to research and development, and marketing - they are deeper than in any other sector. Therefore it has a much greater economic impact than those still impressive headline figures would suggest. We have had to export to grow, but have done so extremely successfully. Ireland is now the largest net exporter in Europe of beef, lamb and dairy ingredients.