Written answers

Thursday, 16 February 2006

Department of Agriculture and Food

Food Industry

5:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 208: To ask the Minister for Agriculture and Food her plans to promote the sale of Irish beef and dairy products worldwide in view of increased competition from outside the European Union; and if she will make a statement on the matter. [6282/06]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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The Irish beef sector in 2005 was characterised by stable market conditions and satisfactory prices. Some 487,000 tonnes of Irish beef, representing 93% of our production, was exported in 2005 with an export value to the Irish economy of more than €1.3 billion or almost 20% of Irish food and drink exports. As a result of effective promotion and marketing to date, 192,000 tonnes or almost 40% of our beef exports went to continental Europe, with the UK remaining our largest single destination with exports of 260,000 tonnes.

The outlook for Irish beef exports in 2006 is largely positive with the decreasing production trend throughout the EU leading to a beef supply deficit of 350,000 tonnes. This situation presents an opportunity for Irish beef producers to further consolidate their position in the high value EU market and should maintain a steady demand for Irish beef in 2006.

Non-EU markets are important alternative outlets for Irish beef and it is my intention to continue our efforts to have the maximum number of third country markets open for our beef exports. The reality, however, is that continental EU and UK markets offer a much more attractive and secure outlet for Irish beef and we intend to continue to consolidate our position in those markets.

In this regard, last September I launched the Bord Bia "Irish Beef in Europe" campaign which is aimed at building sales of Irish beef in European supermarkets and to establish the "Irish Beef" brand firmly in the minds of consumers. This particular campaign involved on-pack promotions in over 8,000 stores which are frequented by some 40 million shoppers every week. I was happy to be in a position to provide Bord Bia with additional funding of €500,000 in 2005 for this campaign.

I participated in one of the on-site supermarket promotions myself in Italy last October. Feedback has been very encouraging in terms of improved demand in response to the promotion and Bord Bia, together with the meat exporters, are planning the details of a further promotion of this nature for our beef in 2006.

The dairy sector has enjoyed a number of successful years on international and EU markets and once again performed solidly in 2005. Some 80% of Irish dairy production is exported to world markets across a broad range of products, including butter, milk powders, cheese, infant formula, food ingredients and functional foods. Exports in 2005 amounted to €1.8 billion.

There is a continual dynamic in global dairy market development and the barriers between internal EU and external third country markets are less restrictive than is the case for beef. The competitiveness of market support measures at EU level is therefore crucial to international trading and I maintain close contact with the Commissioner to ensure that an appropriate set of internal aids and export subsidies are available to maintain the competitiveness of Irish product on world markets. The availability of these aid mechanisms will enable the dairy sector consolidate and increase its share of international markets.

New investment by Irish dairy processors in research and development will continue the drive towards greater levels of innovation and diversity in product mix and will help consolidate and increase our share of the world market. Such innovation is key to unlocking market segments currently restricted by virtue of the product mix available at present.

In terms of competition from outside the EU, the Irish dairy sector has continued to excel against stiff competition from New Zealand, Australia, the US and Argentina. Sales to third countries represent some 20% of total Irish dairy sector output. Despite increased competitive pressures, world prices are expected to remain relatively stable in 2006 and, together with forecast increased global demand for dairy products of some 2% per annum until 2010, Ireland is well positioned to take full advantage of these international trading opportunities.

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