Changes to Tesco’s distribution system in stores near the Border serve to highlight the loss of competitiveness caused by high costs in Ireland, a food industry body said.
Tesco is to reduce prices in 11 stores in a bid to discourage Irish shoppers south of the border from driving north to take advantage of weak sterling prices.
Food and Drink Industry Ireland (FDII) said Irish food companies were not only losing ground in the important UK export market, but also losing market share to British food companies in our own market.
FDII director Paul Kelly said: “The move brings into sharp relief the extent, scope and impact of the loss of competitiveness caused by high costs in Ireland.”
“Over 2,000 jobs have been lost in food manufacturing this year, with many thousands more at risk. This is a wake-up call for Government, they must address our unsustainable cost base, which includes the second highest electricity prices in Europe, waste disposal costs twice the British level and a VAT differential of 6.5 per cent.”
Mr Kelly said the only way to redress the situation was for Government to “aggressively attack the cost of doing business in Ireland”.
“Energy, waste, labour and VAT rates must be brought in line with the UK. There is also an urgent need to support productivity improvements in food manufacturing companies and to introduce a workable export credit insurance scheme, which will enable Irish food companies to compete on a level playing field.”