Value of Irish food and drink exports drops as inflation hits consumer spending

The value of Irish food, drink and horticulture exports declined by 4 per cent last year to €16.3 billion as inflation and cost-of-living pressures impacted on consumer spending.

Bord Bia’s latest export performance and prospects report also cited “significant downward pressure on trade prices” as a reason for the decline.

The 2023 performance follows a record-breaking performance in 2022, when exports jumped 22 per cent.

“More than half of Irish food and drink companies believe their competitiveness has been eroded over the past 12 months, with energy prices, inflation and labour costs having the biggest impact,” Bord Bia chief executive Jim O’Toole said in a statement. “Looking ahead, market volatility and inflation, although slowly easing, will continue to be two key factors for this year, while input and labour costs remain a risk to competitiveness.

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“The market for Irish food, drink and horticulture exports will remain challenged this year,” he added.

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Bord Bia, which also runs the Bloom festival which attracts thousands of attendees to the Phoenix Park every summer, noted that the value of exports remains 24 per cent higher than 2019, “and the industry’s ability to retain much of the growth from 2022 represented a solid performance in a challenging global marketplace”.

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Dairy, which accounts for almost 40 per cent of overall Irish food and drink exports, saw export values decline by 8 per cent to €6.3 billion last year, with a slide in the value of butter and casein exports partly offset by increases in the value of cheese, specialist nutritional powders, yoghurt and whole milk powder.

The value of meat and livestock exports was largely stable at €4.2 billion, as increases in the value of beef, poultry and live exports were offset by lower sheep meat and pig meat exports.

The value of drink exports, which is dominated by whiskey sales, declined by 8 per cent to €1.8 billion due largely to short-term market factors in the North American spirits sector.

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Minister for Agriculture, Food and the Marine, Charlie McConalogue, noted that the value of Irish food and drink exports surpassed the €16 billion mark for the second year in a row and that the sector’s overall exports when non-food products are included was €18.5 billion.

“This is a significant achievement, given that we are living through a period of huge flux, with climate change, inflation, geopolitical instability and cost-of-living challenges all affecting the global economy and export performance,” he said.

Exports to the EU fell 2 per cent to €5.8 billion last year, Bord Bia said, although the share of total exports destined for the bloc remained at around 36 per cent for the second consecutive year. More than half of EU exports went to France, Germany and the Netherlands.

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About €5.6 billion of goods were shipped to the UK last year. While the share of exports going to the UK increased 2 percentage points to 34 per cent, that is still lower than before the Brexit referendum, the board said.

The value of trade to other destinations fell by 10 per cent to €4.9 billion. This decline reflected reduced trade to North America, particularly drink exports. Exports to Asia were down across almost all categories, Bord Bia added.

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