Farm Ireland
Independent.ie

Tuesday 16 January 2018

The agri-businessmen going multinational in response to Brexit

Leslie Codd started his fledgling mushroom business with his brother Raymond back in the 1980s. Photo: Roger Jones
Leslie Codd started his fledgling mushroom business with his brother Raymond back in the 1980s. Photo: Roger Jones
Darragh McCullough

Darragh McCullough

The headlines around Brexit are invariably gloomy, with various levels of economic Armageddon predicted for Irish business, and agriculture in particular.

However, there are some agribusinesses who see opportunity rather than oblivion in the new order that Brexit beckons.

Leslie Codd started his fledgling mushroom business with his brother Raymond back in the 1980s.

In the intervening 30 years the horticultural enterprise has grown into the largest supplier of mushrooms on the Irish market. Codd Mushrooms now employs 225 people at what is one of Ireland's largest mushroom units just outside Tullow. However, the number for the entire enterprise is set to jump to 400 over the next 12 months as Leslie and his team roll out plans to develop another growing site in the UK.

"Most Irish farmers tend not to think of themselves as ever becoming multinational operations but for us it has just become the next logical step," says Codd.

Unlike most Irish mushroom operations, Codds avoided the British market by concentrating on the domestic one on their doorstep.

However, with their mushrooms now accounting for over half of all the Irish market, they are forced to look elsewhere for continued growth. And while the British market was always going to be a logical next step, Brexit has forced the Irish company down a very definite route.

"The British consumer has always been a big supporter of British grown food and we see that clearly in the strength of brands like the Red Tractor. But if they were patriotic before Brexit, they are going to be doubly patriotic now as they perceive that they are having to fend for themselves," explains Codd. "And the big retailers have already reacted. Look at the likes of Aldi and the Co-op who have already declared that all their mushrooms will only be sourced from Britain."

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For this reason, Codd has just signed a deal to form a joint-venture to redevelop an existing 15ac site near Liverpool.

"It was a move that we were contemplating for some time since the production costs are lower in the UK in relation to compost and transport especially. So Brexit just galvanised that thought-process," says Leslie. It will be another 12 months before the site will be at full capacity but the move shows how fast and real the reaction from serious businesses is in relation to the seismic changes that Brexit is bringing about.

Enterprise

Paul Costello is part of an Irish family that owns large farming businesses in Ireland, UK and Germany, with pigs the core enterprise in each location. He is planning to scale up production on the UK sites to meet the demand that continues to outstrip supply.

"Demand for British pork has always outweighed supply but UK slaughterhouses are very keen to source additional volumes at the moment," he said. "It's hard to know whether that is down to Brexit or the pig cycle which is going through a bit of lift at the moment. But we would be quite confident about the future for pork in the UK at the moment.

"Because their economy has been so strong, they have always been prepared to pay for British. But even if the economy over there weakens, that's bad for beef but good for pork."

Case stuy: 'The (UK) election has probably shaken their confidence even more

While some Irish farmers have invested in British farms over the last few decades, there is not major interest in land purchase either side of the water at the moment.

“Land prices are well back over the last year or so,” said Meath farmer Thomas Carpenter. He has bought and sold  large blocks of land in Lincolnshire in the last decade, but feels that there is huge uncertainty in the market now.

“There’s plenty of veg land that was being snapped up for £12,000 and £13,000 per acre that is just not selling at the moment. And the election has probably shaken their confidence even more because they are afraid of a left wing government getting into power.”

However, he also pointed out that the recent weakness in sterling has helped farmers in the UK in terms of the prices that they are getting for the big commodities like grain.

“Where they were getting £100/t for wheat a year or two ago, prices of up to £140/t have been got more recently. But those big guys can’t do without the Single Farm Payment — that’s what a lot of borrowing is based on.”


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