Food and drink industry calls for State aid rules to be relaxed over Brexit

Group wants EU exemption due to possible dire economic consequences

Food Drink Ireland director Paul Kelly said the Irish agri-food and drink sector and its 230,000 associated jobs is uniquely exposed to Brexit, with beef, processed food and dairy the sectors most at risk.

Food Drink Ireland director Paul Kelly said the Irish agri-food and drink sector and its 230,000 associated jobs is uniquely exposed to Brexit, with beef, processed food and dairy the sectors most at risk.

 

The economic consequences of a hard and disruptive Brexit on the Republic’s €12 billion food and drink industry demands a series of exemptions from EU state aid rules, Food Drink Ireland (FDI) has claimed.

The Ibec-funded group said the food industry here was the most exposed element of the economy to Brexit, noting a recent report from the Copenhagen Economics group, which predicted the UK’s exit could see the value of output in the agrifood sector here fall by up to 20 per cent.

It has called on the Government and the European Commission to put in place a package of measures to help businesses deal with the fallout from Brexit.

“The Irish agri-food and drink sector and its 230,000 associated jobs is uniquely exposed,” FDI director Paul Kelly said.

“€4.5 billion of food and drink exports are destined for the UK, with the Copenhagen Economics report highlighting that beef, processed food and dairy are the Irish sectors most at risk,” he said.

‘Economic fallout’

“ There is a compelling case for exceptional state aid support to minimise the economic fallout and job losses arising from Brexit,” he said, noting that the euro-sterling currency squeeze was already putting intense strain on exporters.

“This pressure is likely to intensify as the challenges and economic costs of a hard Brexit crystallise,” Mr Kelly said.

Under the current EU state aid rules, EU governments can only intervene in cases of clear market failure. However, there are provisions within the rules for the use of state aid to remedy a “serious disturbance” to the economy of a member state.

Specifically, FDI wants the Government to introduce investment aids to support Irish companies investing in enabling technology, plant renewal and expansion, refinancing, market diversification and innovation to regain competitiveness following Brexit.