Mr. Eddie Punch:

I will delve deeper into the Brexit adjustment reserve. Maybe the starting point is to understand the way in which our export of lamb, and our sheep business in general, is closely linked to the welfare of the UK sheep sector. We are a major exporter of beef but the UK is not. The traditional markets for Irish lamb have been to sell lamb to France and some other European countries. The French market is notorious in the sense that the French very much pay a premium to their own producers, and there is clear competition between suppliers like the UK and Ireland for the considerable demand that is in France. Unlike beef, we are playing in the world cup in France when it comes to sheep meat. We are up against England and New Zealand. The argument for the BAR in the sheep meat sector is that sheep meat has a unique relationship with the UK in respect of export markets and the fact that we import lamb from Northern Ireland.

On the exchange rate, when you are in competition with a country that has a different currency, exchange rate is very important. There is not any argument but that Brexit impacted the value of sterling against the euro. That can be seen in that prior to the June 2016 vote, sterling was trundling along where £1 was worth about €1.30 or €1.40. Immediately after the Brexit vote, the value of sterling collapsed and has never recovered to that €1.30 to €1.40 value. Today, £1 is worth approximately €1.16. Sterling is much weaker now. There are many economic factors in respect of the exchange rate but it is clear that the graph went down in respect of sterling. Brexit changed in a fairly permanent way the price of sterling against the price of the euro. That means we are competitively disadvantaged in the sheep sector, more so than the beef sector because we do not compete with the UK so blatantly.