Tipperary mushroom exporter blames post-Brexit sterling slump as firm folds
The UK's decision to leave the European Union is likely to have claimed its first victim in Ireland - a Tipperary mushroom exporter whose business has collapsed due to the slump in sterling.
Schiele and McDonald Mushrooms told staff yesterday that it's shutting up shop, battered by a sharp decline in sterling against the euro, which has made its 17-year-old business unviable.
Managing director Peter McDonald said the company was losing between €10,000 and €12,000 a week since the historic June vote.
"We weren't able to cope with the devaluation of the English pound as a result of the Brexit vote," Mr McDonald said. "It's a business with a very tight margin as it is."
He said margins were small in the mushroom industry in general, and most of the trade is with the UK, leaving the sector particularly vulnerable following the Brexit vote.
"It's down to price," he said. "Your price is based on the strength of sterling. The whole thing is further compounded by the fact that Brexit has not only devalued the pound but brought a lot of uncertainty with it. That brings a lack of confidence."
Schiele and McDonald Mushrooms started with just 12 people in 1999 and grew to the point where it employed 70 people and exported most of its 1.5 million kg of mushrooms to the UK.
Read more: Most Irish businesses unprepared for Brexit
It was one of the largest employers in the Tipperary town area, which has seen a number of industry closures in recent years. However, Mr McDonald said the last two or three years had been difficult.
"In a family business, there's a lot more love in it than money at times," he said.
"The mark-up has been significantly reduced over the years. We've had increased production costs and reduced prices in an overall sense."
He told the workers yesterday morning that the company was closing down with immediate effect. He said it was a "very emotive morning, and very upsetting for everybody involved" in the business.
"We're like a big family here," Mr McDonald added.
Fianna Fáil spokesman on horticulture and food, and local TD, Jackie Cahill, said that mushroom farmers throughout the country, who export about 90pc of their produce across the Irish Sea, have seen their margins "shredded" in recent times.
He said 3,500 jobs are at risk in 60 mushroom companies nationwide "if these challenges with sterling exchange rates continue", and he called on the minister for agriculture and food to provide support to the sector.
Bord Bia said in a statement: "Bord Bia is working with Irish food companies exporting to the UK market to assist in identifying and managing the challenges which follow the recent referendum result.
"A key focus for the mushroom industry in the short term is managing currency volatility and, where possible, reducing input costs and increasing returns from the market."