FDI Policy priorities 2026
Competitive Food & Drink
The economic contribution of Ireland’s food and drink sector remains unparalleled within indigenous industry. With exports reaching €19 billion in 2025, the sector continues to demonstrate resilience in a highly volatile global trading environment.
Deeply embedded in regional economies and supply chains, food and drink manufacturing underpins employment, investment and regional vitality, while playing a central role in Ireland’s overall export performance.
However, the competitiveness of the sector is under sustained pressure. Ongoing inflation in energy, raw materials, transport and compliance costs, combined with increasing regulatory complexity at EU level, continues to erode margins in a sector characterised by tight profitability. Labour costs also impact on business viability, with average hourly earnings in Irish manufacturing increasing by 19% between 2021 and 2025. Beyond labour costs, companies are also facing persistent challenges around attraction, retention and housing availability for employees. Geopolitical volatility, shifting US trade policy, and the cumulative impact of new EU measures on packaging, sustainability and supply chains add further uncertainty.
Despite this, food and drink manufacturers continue to buck the broader manufacturing trend, recording small but steady increases in capital investment and R&D activity since 2023. These increases demonstrate a continued, if cautious, commitment to productivity and innovation in a challenging operating environment. Growth in exports further reflects the sector’s ability to adapt to evolving consumer demand and shifting global market conditions.
Ireland’s Presidency of the Council of the European Union in the second half of 2026 presents a strategic opportunity to strengthen the competitiveness of this critical sector this year and beyond. A sharp focus on deepening and completing the Single Market, addressing unfair trading practices within the food supply chain, advancing an ambitious and pragmatic EU-UK SPS agreement, ensuring affordable energy, and enabling a supportive framework for innovation will be essential. The Presidency provides a platform for Ireland to champion policies that reinforce Europe’s food security, trade leadership and industrial resilience, while safeguarding the long-term viability of indigenous food and drink enterprises at home.