Source: IBEC wants Brexit aid exemption for food

Source: IBEC wants Brexit aid exemption for food

The Irish Business and Employers’ Confederation has called for an exemption on EU rules for state aid because of the likely Brexit impact on the food and drinks sector.

In a 20-page report its sectoral body for the food and drinks industry, FDII, said exceptions to the ban on state aid to business are permissible under Article 107 of the EU Treaty  “to remedy a serious disturbance in the economy of a Member State”.

Ireland is the UK’s largest supplier of food and drink. 41% of food and drink exports go to the UK (€4.4bn). This includes 56% of total meat exports, 30% of dairy exports (including 60% of cheese exports), 70% of prepared consumer foods (PCF) exports and 32% of alcohol exports (including almost 50% of beer and over 80% of cider).

An analysis of the historical exchange rate and agri-food and drink export relationship shows that a 1% weakness in sterling results in a 0.7% drop in Irish exports to the UK. If sterling was to weaken further towards the £0.90 mark, this would translate to losses of over €700 million in food exports and about 7,500 Irish jobs.


“Brexit is not just a single market phenomenon. It is a fracture and thus a serious disturbance to the Irish economy,” said the IBEC sectoral body. It called for short-term measures for enterprise stabilisation and funding for investment in competitiveness enhancement and diversification.