Food and drink sector poised for further growth in 2012
20.02.2012
Despite volatile commodity prices and a difficult domestic market, Ireland’s food and drink industry is confident it can build on the exceptional exporting success of recent years, according to a new report from IBEC group, Food and Drink Industry Ireland (FDII).
'Hungry to Grow' sets out priorities for the industry for the coming year and makes a number of recommendations.
The FDII warns, however, that “proposals emerging from parts of government, such as sugar and packaging taxes”, are at odds with the established goal to grow exports by 42pc to €12bn by 2020.
“Irish food and drink exports grew by around 12pc in 2011 and it remains one of Ireland's fastest growing export sectors,” said FDII director, Paul Kelly. “In 2012, global food commodity prices are expected to soften, however, improved competitiveness along with an increasingly diverse portfolio of products, and expansion to new markets will ensure growth continues.
"The domestic market is a key market for food and drink companies, and in almost all cases it is the springboard for export ambitions. However trading conditions remain difficult due to low consumer confidence and downward pressure on margins.
“The food industry needs specific food-related initiatives including the introduction of a grocery sector code of practice and the retention of the existing retail planning cap. We need an unambiguous and unwavering commitment from Government that it will not apply discriminatory taxes to food and packaging.”
The key recommendations from the FDII include avoidance of “discriminatory” taxes on food products and packaging; a focus on the full food supply chain when it comes to competition policy; and a reduction in energy and waste costs to the level of competitor countries
“Food Harvest 2020 lays out a clear strategy and ambitious targets for the agri-food sector to grow exports by 42pc to €12bn by 2020,” said Kelly. “It is vital that all relevant Government policies are aligned with this strategy across all departments and agencies.
“The record exports of almost €9bn in 2011 were achieved by a combination of strong international demand, higher commodity prices and increased volume growth in key categories. However the increasingly volatile nature of food commodity pricing, even if on a long-term upward trend, shows that success should not be taken for granted.”