McDonalds serves up happy meal for NI business
BELFAST BRIEFING:Healthy sales for fast food giant is good news for suppliers in North, writes FRANCESS McDONNELL
HURRAY FOR rising hamburger sales in Europe. It may not be good news for waistlines, but McDonald’s latest European sales figures might at last give recovery-starved firms in the North something to get their teeth into.
The fast food giant, which has seen a jump in sales in Europe, has a big appetite for Northern Ireland produce.
On average McDonald’s buys more than €60 million worth of cheese from producers in the North every year.
One of its biggest suppliers is the Kerry Group-owned Dairy Produce Packers in Coleraine, which last year produced more than 614 million cheese slices just for McDonalds UK.
The fast food chain is also a major supporter of Northern Ireland’s beef industry. Last year it spent more than £11.5 million (€13.5 million) with the Hilton Foyle Food Group, Linden Meats and WD Meat.
And it’s not just food processors that have discovered lucrative export opportunities with the Big Mac king.
Thanks to McDonald’s the likes of west Belfast based Delta Print Packaging, which supplies fast food outlets and is currently working on a biodegradable packaging product, has seen its business grow and has been able to create additional jobs thanks to the purchasing power of the golden arches brigade.
The global fast food group is not alone in enjoying a mutually beneficial relationship with Northern Ireland firms, but its specific role in helping develop new export routes for local businesses cannot be underestimated.
When a McDonald’s customer bites into a cheeseburger in Germany there is a very good chance the cheese slice sandwiched between the roll and the burger came from Coleraine.
The more cheeseburgers the American franchise conglomerate can sell in Germany, the better the order pipeline for cheese producers in Northern Ireland, which not only means job security for existing suppliers but a chance for other firms to get in on the export act.
According to the new president of one of the North’s largest business bodies, getting Northern Ireland produce, skills and services out of the region for the right price is a sure fire way to transform the local economy.
Francis Martin, who has just taken over the presidency of the Northern Ireland Chamber of Commerce, says it is vital that companies in Northern Ireland look outside for new business opportunities if they want to survive the recession.
The chamber is carrying out an in-depth review and analysis of the local economy and is gathering feedback from members to get a precise picture of where the North is at in relation to the economic downturn.
It intends to produce its first economic policy paper in the autumn and early findings suggest local businesses are battling a number of core problems.
Martin says these range from difficulties in securing credit and finance to reduced orders, rising costs and late payments.
“What we know is that these are immediate issues which can have a domino effect on firms and which in turn can threaten their viability.
“There isn’t going to be a soft landing from this economic crisis – we need to recognise the difficulties and get on with it,” he says.
Martin, managing partner of BDO Northern Ireland, knows at first hand the extent of the challenges facing Northern Ireland.
“We need to help the economy help itself. There has to be a ground-up approach in Northern Ireland to dealing with our challenges.
“We have got to encourage businesses to become more self-sustainable, but we have also got to address Northern Ireland’s poor productivity levels, which have led to poor economic prosperity,” he says.
Martin is under no illusion on the immediate future; the North is about to enter a period of “austerity” and he believes the “stoic” approach that many businesses in Northern Ireland possess will enable them to survive.
“There has to be cuts in public expenditure – we recognise that – and there are very difficult decisions to be made, but what we must ensure is that decisions are not made on the basis of political expediency but for solid economic reasons. Northern Ireland does not need short-term measures to alleviate the problem.
“We cannot loose sight of the need for continued capital expenditure and investment in Northern Ireland. It underpins the economy and we must protect that,” he stresses.
Martin firmly believes that a “rebalancing” of the North’s economy from a public-led to private-driven one is now crucial, but the way this is managed could mean the difference between success or failure in the immediate future.
“The Northern Ireland Executive are talking and listen to the business community right now and there is a tremendous opportunity for us to tackle the issues, but necessary cuts will mean very unpopular decisions and we will have to see if there is the capacity to do this,” Martin says.