Irish food industry turning to Middle East due to Brexit

Ireland's €20 billion food and beverage industry is turning to the Middle East for sales as the United Kingdom, its biggest buyer, prepares to move ahead with Brexit and leave the European Union.

The UK accounts for 43 per cent of Ireland's agriculture exports, buying about €1 billion each of beef and dairy products a year, Minister for Agriculture Michael Creed said in an interview in Dubai.

Ireland’s biggest markets in the Middle East are Saudi Arabia, at about €135 million a year, and the United Arab Emirates, at about €60 million, with cheese and other dairy products leading sales in both, he said.

Ireland reached an agreement this week to sell processed, cooked, minced and bone-in beef to Saudi Arabia, Mr Creed said.

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No country is feeling the pressure from the UK’s vote to leave the trading area more than Ireland. The UK is the top destination for the country’s exports including Guinness beer and Kerrygold butter.

Thirty years of EU quotas that limited milk production ended in 2015, leaving 18,000 Irish dairy farmers to look for new export markets to take in their growing output.

‘Unique exposure’

Ireland’s “unique exposure” to the UK market makes it strategically important for the country to diversify its sales, Mr Creed said in a Bloomberg TV interview in Dubai.

“Trade wars don’t suit us,” he said. “Trade missions in the context of Brexit take on an added imperative.”

Ireland wants to boost its agriculture exports to €19 billion by 2025 from €11 billion in 2016, he said. The Middle East, North Africa and Southeast Asia are attractive because of a growing middle class, westernised diets and increased consumer spending, he said. China is now Ireland’s second-biggest market for dairy and pork exports, after the UK.

Mr Creed is in Dubai this week after visiting China, Vietnam, South Korea, Singapore, Saudi Arabia, Morocco and Algeria in the last few months.

About 90 per cent of Ireland’s farm output is exported. The food and beverage industry has annual production valued at about €20 billion, said Tara McCarthy, chief executive of the Irish Food Board.

“We have identified hot spots around the globe that we see as offering significant potential,” Mr Creed said, highlighting opportunities in areas of the Middle East, North Africa and Southeast Asia.

Ireland exported “huge volumes” of beef and sheep meat to Iran in the 1980s and 1990s but hasn’t been able to take advantage of a trade deal it completed in October to export sheep meat to Iran because of difficulties in getting payments out of the country, he said.

Iran can be a gateway for sales elsewhere, including Russia, which is currently closed to direct exports of some EU foods, including dairy products, due to sanctions.

“If we can get into Iran, the opportunities for re-export from Iran into other countries are significant,” he said.

– (Bloomberg)