Ms Tara McCarthy:

I will begin by responding to Deputy Pringle. He is absolutely right that tariffs are a significant concern for companies in the context of Brexit. If we were so inclined, we could do nothing other than look at the many possible Brexit scenarios. We are trying not to get blocked into that one. We are looking at doing the risk analysis for companies. Last year, we did a significant piece of work called the "Brexit barometer". We spoke to representatives of companies that account for approximately 70% of exports to the UK about their key areas of concern. The Deputy is absolutely right when he suggests that tariffs, the calculation of tariffs and non-tariff barriers are key areas of concern. We need to look at the complexity that Brexit will add to the supply chain. Delays at borders will cause new costs, perhaps because of decreases in product quality, longer hours worked by lorry drivers or other time factors. New challenges will be faced on the route to the market. New competitors will be encountered as well. Other challenges relate to currency issues and the associated volatility.

We have been looking at helping companies to calculate tariffs. As many of our exporters export predominantly to the UK, or even to the UK and Europe, they have not had any experience of touching tariffs for many years. We have two objectives in mind. We are working out the risk, but we are also looking at market diversification, which means we will need new skills in our industry. As the idea of going outside the EU becomes more realistic, skill sets will need to be developed. We are piloting a new training programme with companies so that they understand how to work with tariffs. We want to make sure that is bedded into their system. While Brexit is not considered desirable or helpful within the industry, it is accepted as a market reality. We need to know we can deal with it. We are introducing a training programme for companies with that perspective in mind.

We are also looking at it from another perspective. Companies that import certain products, such as some of the ingredients they use, are facing a realistic threat as well. They need to know how to calculate the import tariff. They need to understand the consequences of such imports from the perspective of VAT refunds, for example. They need to know whether Brexit will increase the cost of doing business with their suppliers.

I am not suggesting nobody is worried about Brexit. There are multiple concerns when it comes to Brexit. We are trying to break it down into manageable and realistic chunks by focusing on skill sets, on what people can do about Brexit and on the scenarios that might have risks associated with them. The focus on scenarios has led to the market diversification projects we have been looking at. That has not resulted in a suggestion that we should all move to France or Germany. We are dealing with very different stories in each product category. Some sectors have very few options as they decide what to do. Approximately 95% of the exports in the horticulture industry go to the UK. There are quite a few options in that industry because its products tend to have a seven-day shelf life and, thankfully, attract low tariffs. We are trying to ensure we add as much value as possible in that regard.

Particular reference has been made to the cheddar market. Clearly, 50% of our cheddar exports go to the UK. We do not envisage that the first opportunities for those products will be in France. That is why we specifically called out cheddar within the market prioritisation process. We are finding that we need to look at where food service products are growing. Rather than focusing on the kind of high-quality mature cheddar that is produced today, we are looking at the use of processed cheddar in products like burgers and pizzas, etc. We are looking for such base opportunities in various markets in the first instance. We have already found that the Japanese market is potentially a strong market for importing cheddar into. As a result of the new Japan-Europe trade deal, the tariffs on those products will decrease significantly in the coming years. We are looking outside the box at such opportunities.

As I said earlier, we want as long a transition as possible to facilitate the negotiations on Brexit. It will take time for Ireland to build its reputation in these markets. It will take time to recognise who the right contacts in those markets are.

We would appreciate having as much time as possible, as would our exporters.

The Deputy asked where the next market after the United Kingdom was. We export over €4 billion worth of goods to the United Kingdom. The United States is our second largest market. It hit the €1 billion mark this year for the first time. Some 50% of our exports to the United States are alcohol products. Dairy products account for the second highest percentage. We consider Europe to be one group of countries, to where 33% of our exports go.

The Deputy asked which markets were growing the fastest and where there was growth. Last year there was 8% growth in exports to the UK market, 16% growth in exports to the European market and 17% growth in exports to international markets. Growth was very robust. As Deputy Jackie Cahill knows, dairy prices, particularly butter prices, skewed a lot of the figures because, given our butter exports to the Netherlands and Germany, butter export values increased significantly and that had an impact. There are multiple factors that influence the where, what and why in all of these markets. We are trying not to ask to what country we will go but rather what sector will be the most attractive in what location. We are merging the two scenarios and looking at the macroeconomic forces, the ease with which we can export to a particular country and its track record with Ireland.