FDII Warns Thousands of Jobs Under Threat Following Brexit

13 Sep 2016 --- Thousands of jobs are under threat in Ireland's food and drinks sector in light of Britain voting to leave the EU, according to Food and Drinks Industry Ireland (FDII), which has outlined a series of proposals to combat the impact of Brexit.

FDII director Paul Kelly said "urgent action" is needed to protect Ireland’s exports into the UK market amid competitive pressures caused by the fall in value of sterling.

Kelly said: “Urgent action is now required to protect our vital exports to the UK market, limit damage in the domestic market from imports, and address competitive pressures caused by the fall in sterling. A failure to act will compound the pressure on exporters, undermine Ireland's long-term position in the market and threaten jobs.

“In addition to an immediate response to the currency shock, we need to work towards a positive outcome in formal exit negotiations. The main objective must be to maintain full unfettered access to the UK market for Irish exporters. UK access to the EU single market is much more preferable to UK bilateral agreements with third countries.

"A structural shift in exchange rate relationship, combined with Brexit related trade risks means that UK buyers are planning significant supply chain restructuring – the real threat is a loss of confidence in Ireland as a competitive supply base resulting in loss of markets and exports.

“The Government’s short term objective must be to support companies as they reposition their businesses during this period of uncertainty. The focus must be on maintaining markets in the UK, developing other markets as well as ensuring that, in the domestic market, companies remain competitive against imports and the threat of cross-border shopping.”

The report compiled by the FDII recommends a review of the national agri-food strategy FoodWise 2025; budget tax reform to improve Ireland's competitive position; and the re-introduction of the Employment Subsidy Scheme and the Enterprise Stabilisation measures that were last applied in 2009-11.

It also include a survey across the Irish food and drink sector, which found that 64 percent of companies said exchange rate movements would have a negative impact on business.

Key policy recommendation from the FDII

  A review of the impact of Brexit on the objectives contained in the national agri-food strategy FoodWise 2025.
    A Government established taskforce led by the Department of the Taoiseach to engage with the food and drink sector on implementing immediate measures that will safeguard today’s business and trade flows in the face of this major challenge to our competitive position.
    The re-introduction of the Employment Subsidy Scheme and the Enterprise Stabilisation measures which were last applied in 2009-11.
    €25m ($28m) in funding for market diversification and product innovation measures.
    An access to finance package that includes sustainable financing via funding from the Irish Strategic Investment Fund and improved State Aid rules.
    An intense on-going focus on cost competitiveness led by a Department of Jobs, Enterprise and Innovation in areas such as labour, energy and insurance.
    A fully ‘Brexit-proofed’ Budget which will address tax competitiveness against the UK