Strong growth in overseas beef and drink sales helped food exports overcome falling prices and record an overall increase in 2005, according to the latest Bord Bia figures. Barry O'Halloran reports.
Bord Bia, the body responsible for promoting and marketing Irish food products, said yesterday that exports grew by 0.7 per cent to €7.1 billion in 2005 from €7 billion the previous year.
A 6 per cent increase in the value of beverage exports to €10.75 billion from €10.1 billion and a 2.5 per cent jump in the value of meat and live animal sales to €21.3 billion from €20.8 billion drove most of the growth. The board's chief executive, Aidan Cotter, said yesterday that within the meat and live animals sector, beef sales to continental EU markets grew by 11 per cent.
Sales of prepared foods stayed level at €15.2 billion, while the value of dairy and ingredient exports dropped 2.2 per cent to €18.2 billion from €18.6 billion.
Bord Bia's sectoral review and outlook said that cuts in EU aid for casein (a protein derived from milk) and in export refunds, contributed to the fall in the value of dairy sales. However, it pointed out that volumes increased. "Favourable market conditions for casein in particular have helped to lessen the severity of these cuts in support in the first half of the year at least," it said.
The review added that the impact of cuts agreed in the Common Agricultural Policy (CAP) mid-term review in July were felt during the final quarter of 2005. The value of fish exports dropped 2.7 per cent to €360 million from €370 million. The sharpest fall was in horticulture and cereals, which dropped 4.1 per cent to €172 million from €179 million. The board pointed out that the Republic grew food exports against a difficult trading environment, including falling prices in most of the industry's main markets.
"There is strong competition in most markets, and increased competition in the larger markets," Mr Cotter said yesterday.
He added that Irish producers were also feeling the impact of ongoing mergers between big supermarket chains, and the increased muscle of discounters like Aldi and Lidl.
"Every time they renew their supply contracts, the price drops," he said. The review also stated that the Republic's food industry remains vulnerable to currency changes.
While sterling is expected to strengthen against the euro this year, which would boost Irish products' competitiveness, the increase is expected to be small. The industry would also suffer with many others if there was a significant fall in the dollar's value.
"The challenge facing Irish food and drink exporters in 2006 will be to continue to invest in the development of new products and routes to market which will allow them to compete successfully in what are likely to remain difficult trading conditions," Mr Cotter said.
Bord Bia is planning a number of marketing and promotion drives in the Republic's main markets for the year ahead.
