Sport of kings high­lights Brexit trade threat amid fears of los­ing UK ‘twin’

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE - Peter Flana­gan

FOR a primer on the risks to trade from Brexit, just ask the Ir­ish horse in­dus­try. The €1bn bil­lion blood­stock sec­tor — made up of rac­ing and breed­ing — em­ploys close to 15,000 peo­ple in Ire­land, ac­cord­ing to Deloitte.

Much of the busi­ness cen­tres around the UK, leav­ing one of the world’s big­gest blood­stock pro­duc­ers vul­ner­a­ble to its near­est neigh­bour’s de­par­ture from the Euro­pean Union.

“Eighty per cent of our ex­ports are to the UK and it’s not like you can turn around and say ‘let’s repli­cate that some­where else’, so it’s a big worry,” said Brian Ka­vanagh, ceo of gov­ern­ing body Horse Rac­ing Ire­land.

The sec­tor is a mi­cro­cosm of the wider chal­lenges pre­sented by Brexit, and last month, Ir­ish in­dus­try rep­re­sen­ta­tives met EU of­fi­cials in Brus­sels to high­light the scale of those po­ten­tial prob­lems.

Ster­ling’s de­cline has al­ready hurt rev­enue, and the Ir­ish and Bri­tish horse in­dus­tries, so close they are es­sen­tially twins, face the prospect of de­lays, tar­iffs and a long-drawn out spell of un­cer­tainty.

“As a com­pany, we can’t make any con­crete plans be­cause we don’t know where Brexit will end up,” said Henry Beeby, CEO of Goffs, the horse auc­tion house in Kil­dare, about 20 miles from Dublin.

“We have no clar­ity on some­thing that could have such a big im­pact on our lives.”

With about 15pc of its ex­ports go­ing to the UK, Ire­land is the EU na­tion most ex­posed to Brexit.

Out­side Dublin, home to the Euro­pean head­quar­ters of com­pa­nies like Google, much of the econ­omy re­mains agri­cul­ture-based. Close to 40pc of all Ir­ish food and drink ex­ports go to the UK — Ire­land ac­counts for 70pc of Bri­tain’s beef im­ports, for ex­am­ple.

In the horse trade, much of the money is in flat rac­ing, where top race win­ners can earn their own­ers mil­lions in stud fees af­ter re­tire­ment.

Ir­ish blood­stock mil­lion­aire John Mag­nier’s Cool­more cut its fees by as much as 43pc in the wake of Brexit, with the av­er­age re­duc­tion 12pc.

“Many of our clients trade in ster­ling so in re­sponse to its de­cline in value we have re­duced the fees for the ma­jor­ity of our stal­lions,” David O’lough­lin, a spokesman for Cool­more said when the fees were an­nounced. “They are now very com­pet­i­tively priced.”

About 10,000 horses move back and forth be­tween Ire­land and UK for rac­ing and breed­ing a year, eased in part by an agree­ment al­low­ing free move­ment of thor­ough­breds be­tween the two na­tions and France. The next clos­est is France at about 5,000.

“To a large ex­tent the horse rac­ing and breed­ing in­dus­tries of the UK and Ire­land op­er­ate as one with horses, train­ers, riders, agents, sta­ble lads, own­ers, vets reg­u­larly mov­ing be­tween both ju­ris­dic­tions,” the Ir­ish Thor­ough­bred Breed­ers’ As­so­ci­a­tion told a par­lia­men­tary in­quiry into the im­pact of Brexit.

Horses move­ments could be slashed if Brexit means horses en­ter­ing the UK have to go through new quar­an­tine pro­ce­dures and other bor­der checks, while trade in geld­ings, a cas­trated horse, could be hit with an 11.5pc tar­iff if no trade deal is agreed.

Mean­while, out­side the EU, the UK in­dus­try could quickly grow more com­pet­i­tive.

“The pos­si­bil­ity of the UK in­tro­duc­ing in­cen­tives for its in­dus­try over time is a real threat, es­pe­cially if rac­ing in Ire­land is still ex­cluded from the usual state aid ex­emp­tions for agri­cul­ture,” El­iz­a­beth Headon of the Al­liance for Rac­ing and Breed­ing, which rep­re­sents about 10,000 peo­ple in the in­dus­try, told the com­mit­tee.

Brexit could also hurt the UK in­dus­try. Nine out of 10 horses rac­ing at the North­ern Ir­ish tracks of Down­patrick and Down Royal are trained in the Repub­lic of Ire­land, ac­cord­ing to Headon, who de­scribed the Ir­ish and UK sec­tors as “twin in­dus­tries”.

“It isn’t two sep­a­rate mar­kets, it’s re­ally one,’’ says Beeby.

“The UK re­lies on Ir­ish horses to sup­ply its race meet­ings and that would be hit hard by Brexit too. There’s no other coun­try that can repli­cate that re­la­tion­ship for the UK.”

Horse Rac­ing Ire­land ceo Brian Ka­vanagh

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