Ireland’s meat industry has most to lose from a Brexit scenario

Ireland's meat industry is most at risk from a potential British exit of the European Union, according to a report by credit insurer Euler Hermes.

Its report highlights the industry’s high reliance on exports to Britain, which accounts for over 50 per cent of beef exports alone.

“This export dependency is of particular concern as the UK assesses the possibility of exiting the EU,” said Dean O’Brien, country manager of Euler Hermes Ireland.

“Should the UK vote to leave the EU, it would have to reassess all trade agreements, including those with Ireland.”

"In that scenario the UK may possibly seek cheaper supply, possibly from South American alternatives like Brazil, " he said.

However, Mr O’Brien said the risk was somewhat mitigated by the higher standards expected by European consumers in terms of quality, “giving Ireland a good chance of remaining in the race.”

In its report, Euler Hermes forecast the value of Irish meat exports to reach €2.8 billion in 2015 and €3 billion in 2016.

Overall, it predicted a mixture of strong domestic demand and foreign trade would push Irish food and beverages output up 8 per cent to €26 billion, and agriculture output up 12 per cent to €8 billion by the end of 2016.

Nonetheless, it warned that a glut in global food production, spearheaded by the dairy sector, was continuing to push agricultural prices down, negatively impacting farmer incomes here.

The Global Food Index declined by 19.2 per cent to a six-year low in June. This was mostly down to dairy products which experienced a sharp 29 per cent slide year-on-year, combined with a fall in all other agricultural commodities, including meat, which fell 17.5 per cent.

“The situation is improved by Ireland’s positive net trade effect, notably its positioning as a premium food product exporter, ” Mr O’Brien said.

“This may reap future rewards too, with the continuing expansion of the global middle-class - forecast to nearly double to 40 per cent of the world population by 2020 - and the shift towards finer foodstuffs as people become wealthier,” he added.

According to the Central Statistics Office and the Department of Agriculture, the difference between world commodities' prices and Ireland's premium positioning favours the latter and amounted to a gain of €368 million in 2014.