70pc of Irish agri food companies are stockholding due to Brexit - Bord Bia report
Levels of Brexit stockholding amongst Irish food and drink companies has doubled to 70pc, according to the latest Bord Bia Brexit Barometer 2019 Results and Actions report.
The report highlighted that while 93pc of companies are prepared for Brexit compared to 74pc in 2018, firms are increasingly concerned by the cost implications of customs and compliance and stockholding.
The report showed that 88pc of respondents are clear that Brexit will have an impact on their business but 68pc are still uncertain about what that impact will be.
70pc of companies have developed contingency options for holding stock in response to Brexit, with 85pc of companies activating those plans. 92pc of dairy firms have stockholding facilities in the UK.
Over 52pc of respondents are holding up to three weeks of stock outside Ireland. The report states that in the lead up to the October Brexit deadline, stockholding will become far more complex due to storage being at full capacity in preparation for busy Christmas trading.
It also outlined that there has been a doubling of firms counting the costs of customs, with 83pc of companies confident in managing customs, up from 28pc last year.
85pc of companies have applied to Revenue for an EORI number, however 49pc of companies have still yet to factor customs in to their financial planning.
The number of firms who have actively mapped their supply chain has increased significantly to 89pc compared to 62pc last year. 62pc of firms have identified a critical dependency on a supply chain partner.
However there are clear levels of discomfort amongst respondents about how prepared some supply chain partners are.
Meanwhile two thirds of companies have said that Brexit is having an impact on their investment plans in comparison to 50pc last year, while 29pc have put investments on hold and 20pc have delayed or put operational spend on hold.
Almost half of companies added that they expect Brexit to cost them in the region of 1-10pc nationally.
However, 79pc of Irish food and drink companies have spoken to customers about Brexit in the last month, rising to 96pc in the past three months. Key topics discussed are stockholding, custom duties and the sharing of general Brexit updates.
In the past year 58pc of respondents reported an increase in sales to the UK and a further 29pc reported stable revenues.
The Barometer shows a shift in focus from growth in the UK to maintaining market share, with 74pc of companies now actively seeking to expand in to new markets, with 57pc of companies reporting encouraging growth outsideof the UK.
Speaking at the launch of the report Minister for Agriculture Michael Creed added that while the coming months will bring another Brexit deadline he said it is encouraging to see that companies are doing all they call to prioritise what it can control in facing these challenges.
Bord Bia CEO Tara McCarthy stated that the report shows the resilience and determination at the heart of the Irish food and drinks industry.
“What the Brexit Barometer shows is that our industry is attuned to the issues that lie ahead and both realistic and resolute in the response to them. Eight out of ten companies plan to maintain or grow sales in the UK, whilst simultaneously three quarters of Irish companies are actively looking beyond familiar marketplaces,” she said.
“This process if gaining momentum s planning around Brexit translates into concrete actions in the months ahead.”
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