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New Bord Bia boss Tara McCarthy is taking a pragmatic approach to Brexit, writes

EHIND every single sector there is a Brexit story,” says the new Bord Bia chief Tara McCarthy.

From losses in the mushroom industry to the fears over South American imports knocking our beef off British supermarket shelves, Brexit has dominated the agenda since the West Cork woman took the hotseat at the Irish food and drinks promotion body earlier this year.

“Nobody has the right answer here but it is about scenario planning to see where your pressure points are going to be,” she said of the challenges facing the €11.1bn food and drinks industry in a changing international marketplace with Brexit, oil slumps and the new Trump regime.

Businesses that farmers depend upon to buy their produce have been undergoing the Bord Bia ‘Brexit Barometer’ to establish their potential liability in the tumultuous times ahead.

“It is very hard to say that you are prepared for Brexit, you are dealing with an environment that is really uncertain and all you are trying to do is have a little bit more scenario planning for your business to try to manage your way through,” she said.

There have already been two scenarios faced by businesses from Brexit — with the first being the currency volatility that saw sterling swing in value and curb the value of Irish imports.

“That for those who weren’t hedged was a short sharp lesson on the benefits of hedging, and that was where the mushroom industry got really hit,” she said, with Bord Bia working hard to deliver key insights behind hedging to help small and medium-sized businesses buy time for their businesses.

Another key factor was route to market with businesses seeking to guard their margins by negotiating smaller pack sizes or other factors.

Over the years the food industry has dealt with many crisis from the BSE issue that saw markets vanish overnight to the more recent the horsemeat scandal that was found in many countries across Europe.

“BSE hit one sector but this is hitting every single sector. To me this is the biggest strategic issue the industry has ever faced,” explained the Bord Bia chief who took over the post following the retirement of Aidan Cotter earlier this year.

“It is hitting every sector at the same time. In some ways as well with BSE, there were an awful lot of ‘knowns’ and you could map your way through with certainty.

“It is the ‘unknowns’ here that is a key part of it. It is the constant unknowns that you are working through, and the uncertainty of every week — whether that is the UK elections, will negotiations be starting on Monday or won’t they. All of that is uncertainty that you have no controllables for and that is what makes this particular challenge unique and huge.”

The portfolio of food and drink business in Ireland is diverse from the likes of the dairy giant Glanbia to small craft beer producers, with dependence on the UK varying widely.

The UK is Ireland’s largest market for food and drink, accounting for 41pc of Irish food and drink exports, valued at €4.4bn. Between 2010 and 2015 Irish exports to the UK increased by €1bn largely driven by increased meat exports.

Beef

With 95pc of Ireland’s beef exports go to the Europe and 50pc destined for the UK, there have been concerns over potentially cheaper beef from South Amer- ican countries undercutting Irish produce, but Ms McCarthy has doubts about how realistic that scenario is.

“The UK is a deficit market for beef and we are the number one supplier to fill that deficit.”

However, Ms McCarthy cautioned the potential scenario of a 50pc tariff on beef entering the UK if talks do not secure a soft Brexit must be examined.

“The UK still won’t be self-sufficient on beef and will still have to import it from somewhere,” she said, adding that we must position ourselves as their “best solution” in terms of understanding the needs of consumers.

She pointed out that talk over a ‘bonfire of regulations’ by UK farmers when they leave the EU was missing the point. “It is not the EU that has really been putting on most of the asks of food production, it has been the retailers and your customers,” she said. “They are not reducing their rules and there is no where outside of Europe that will be able to deliver the same set of rules as we can.”

Ms McCarthy said in recent meetings that they have held with chains including Tesco they stated their buying teams are among the “most sophisticated and possibly ruthless” and they have chosen to source from Ireland and the UK.

“You would want to give them a compelling reason to risk their consumer confidence and brand by sourcing elsewhere,” she said.