The Irish agri-food and drink economy has weathered uncertainty around Brexit to report that exports eclipsed €11bn ($11.7bn) for the first time in 2016. Increased exports to North America and China offset a plunge in trade with the UK in 2016 triggered by Brexit, according to figures from the Irish food board.

Minister for Agriculture, Food and the Marine, Michael Creed, said: “2016 marked the 7th successive year of growth of Irish food and drink exports, with a further 2 percent increase recorded to reach a record high of €11.15 billion, an expansion of 41 percent or €3.3 billion since 2010.”

“The strongest performing sectors last year were prepared foods (€1.92 billion, +9 percent), beverages (€1.4 billion, +4 percent) and dairy product and ingredients (€3.38 billion, +2 percent).”

“One of the notable features of this achievement is the impact of market diversification in the year in which the UK decided to leave the European unio.”

“While trade with the UK fell by 8 percent triggered by challenging exchange rates, uncertainty arising from Brexit and further competitive pressures, this was offset by increased exports to international and emerging markets such as North America (+€200 million to reach €1.1 billion), China (+35 parent to reach €845 million) and the rest of Asia (+6 percent to reach €330 million).”

“An overall increase of 13 percent in shipments to international markets, to reach a value of approximately €3.5 billion, was particularly remarkable” added the minister.

Meanwhile, a recovery was also seen in continental EU markets (+3 percent) as improving economic conditions led to stronger demand in key categories. 

The euro strengthened by 13 percent against sterling in 2016 while there was little change in exchange rates with the US dollar. 

According to estimates from the Irish food board, the underlying weakness and volatility of sterling negatively affected the competitiveness of Irish exports reducing the value of trade by a potential €570 million ($605m).

The minister noted the critical importance of the UK market moving forward.

He said: “The UK will continue to be a critically important market for Irish agri-food products. The triggering of Article 50 and the continued uncertainty around Brexit will present significant challenges for the sector. However, the 2016 export figures illustrate clearly the importance of collaborative action by Government, its agencies and the industry, and the potential for pro-active effort on international markets to mitigate the risks associated with these challenges.”

Padraig Brennan, director of markets, Bord Bia, highlighted how increased volume in key sectors, and an improvement in market demand for key categories, helped boosted trade throughout 2016. “Some 80 percent of total export growth in 2016 was recorded in trade to international markets wher higher demand, improved market positioning and relatively steady exchange rates helped improve the competitive position of Irish exports” commented Brennan. 

“Since 2010, international markets have accounted for half of the growth in total exports, which reflects the industry’s ability to identify and develop new business opportunities. Irish food and drink exports to China have increased six-fold in six years, while exports to North America and the Rest of Asia have doubled in the same period.”

Looking ahead to 2017, the Irish food board said export markets look set to remain challenging amid ongoing market uncertainty. However, the pickup in global dairy demand is expected to continue while further opportunities for growth are likely in beverages. Increased beef export availability may put some pressure on returns while prepared consumer foods exports are likely to face on-going competitive pressures, most notably the UK.

“As an exporting country, we need to identify and act on market opportunities promptly. The continued efforts of my Department in international markets and the additional funding for Bord Bia’s marketing strategy, which I have made available in both 2016 and 2017, will assist Irish exporters in their efforts to retain and diversify export markets,” minister Creed added.

Food and Drink Industry Ireland (FDII), the Ibec group representing the food and drink sector, today said Bord Bia export figures for 2016 highlighted the challenges facing the sector and reinforce the need for significant government investment in market development. 

FDII director Paul Kelly said: “Currency pressure following the Brexit vote have already hit exports and jobs. These problems have the potential to get a lot worse in the event of a single market fracture post-Brexit. 

“The national agri-food strategy ‘FoodWise 2025’ identifies market development as one of the key strategic pillars to deliver growth. Brexit however has put that aspiration into sharp focus given currency challenges and potential new barriers to market access. 

“A market diversification and product innovation strategy is required which focusses on maintaining UK market share, increasing exports to other EU and international markets and investing more in product development.”