Meat industry faces export cost increases of 40%, MII tells Oireachtas Committee
Meat processors and exporters are experiencing increases in export costs of up to 40% due to the loss of frictionless trade caused by Brexit. In a submission to the Joint Oireachtas Committee on Agriculture and the Marine, Meat Industry Ireland (MII) said the increased costs are due to new Customs and sanitary/phytosanitary (SPS) processes, delays and disruption in logistics and direct transport cost increases.
Whilst the increase in direct sailings to Continental Europe has helped provide exporters with an alternative to the UK Landbridge, MII says that it costs between €500 and €800 extra per truck to send exports to Continental Europe direct. In addition, where exporters are sending trucks to the UK hauliers are facing difficulties filling their trucks for the return journey due to paperwork and logistical minefields, which means they are looking to increase the costs they charge per journey.
MII also expressed concern about the range of further Brexit measures coming in between April and July. For example, from 1st April all products of animal origin will need to be accompanied by a veterinary certificate. This will require over 350,000 Export Health Certificates to be issued per annum, with serious potential to cause trade flow disruption and add more cost to exporting.
The Brexit challenges compound the difficulties the sector is facing due to the Covid-19 pandemic which has decimated demand for Irish meat products from the food service and restaurant sector on which it is so reliant. In the beef sector, this affects steak sales in particular as restaurant, catering, and food service channels account for some 60% of our steak sales. Burger sales are also impacted as fast-food outlets throughout Europe are operating at significantly reduced levels due to national lockdowns in many of our key markets. With summer BBQ season many months away opportunities to promote greater sales volumes through the retail channel are limited.
Over the course of the pandemic, increased sales through retail have helped but not enough to offset the decrease in foodservice. The UK uplift in retail sales experienced in early January (coinciding with the announcement of new lockdowns) has returned to normal sales levels. UK customers are starting to work through the backlog of pre-Brexit stockpiles thereby reducing their immediate demand for fresh product.
Meat Industry Ireland Director Cormac Healy said: “All agencies and those in the food supply chain have done excellent work to maintain the flow of trade since Brexit kicked in on 1st January, but just because tariff and quota free trade has continued doesn’t mean the changes imposed by Brexit aren’t wide ranging and costly. And we have serious concerns about the potential for disruption when new export certification arrangements come into effect in the UK from 1st April.
“We are dealing with the double whammy of COVID-19 and Brexit and both are relevant to the current market dynamics. COVID-19 lockdown restrictions across Ireland, the UK and Europe are leading to a major drop in demand throughout food service channels, and Brexit contingency stockpiles put in place ahead of the Brexit deadline are now being released and reducing demand.”
Meat Industry Ireland (MII) is the Ibec sector association representing the meat processing industry in Ireland. The sector generates export revenues of over €4bn, employs over 16,000 staff and supports the livelihoods of 100,000 farmer suppliers.