Irish food firms develop an appetite for UK market

Post-Brexit, Irish companies look at setting up shop in UK to safeguard against tariffs

Ornua has bought a cheese plant in Cheshire, and a number of other Irish food producers may set up plants or buy up companies in the UK. Photograph: Phil Noble/PA

Ornua has bought a cheese plant in Cheshire, and a number of other Irish food producers may set up plants or buy up companies in the UK. Photograph: Phil Noble/PA

 

There is a lot of talk about the hoped-for inflow of financial services firms related to Brexit. But there will be a flow of outward investment, too. Some Irish-owned firms selling to the UK market will establish plants in Britain, or buy existing operations there. This is one obvious safeguard to the risk of customs checks and tariffs for those selling into the UK market.

On Wednesday Ornua, formerly the Irish Dairy Board, announced that it was buying a cheese plant in the UK market, FJ Need in Cheshire, with an annual turnover of €50 million. Ornua already has operations employing some 950 in the UK – and is also expanding in other markets, notably Germany and the US, meaning its move is not purely Brexit-related.

But in its statement announcing the acquisition, the company noted that the move “will also strengthen Ornua’s UK business’s capabilities in the post-Brexit environment”. Decoded from business-speak, this means it will be able to serve UK customers from a UK plant, if needed.

High tariff barriers

This is likely to be a trend, presuming – as seems likely – that the hard-Brexit narrative keeps going. For food companies, in particular, facing potentially high tariff barriers if the UK and EU cannot agree a deal and WTO tariffs come into force, UK acquisitions may make sense. It will vary from business to business: some will choose to concentrate on non-UK markets, such as France, while others will bet that they will still be able to serve UK markets from the Republic. But it would be a surprise if the UK industrial agencies were not already sounding out firms from the Republic. This would include Invest NI in the North, which could see opportunity in luring smaller businesses that might want a UK base but might not be ready to cross the Irish Sea.

New trading deal

There are a few unknowns here. The most obvious one is what trading arrangements will apply between the UK and the EU in the long term. A vital issue also is what happens in the interim period between Britain leaving the EU and a new trading deal coming in to force, which may involve a gap of four years or more.

Britain takes some 40 per cent of Irish food exports and many companies will not want to take the risk of access being hindered to a key market.

Get ready for a string of UK purchases and investments by Irish food firms.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.