Darragh McCullough: ‘Meat processors need to prove they haven’t given up on our beef sector’
The Brits’ notions of a glorious Brexit are slipping through their fingers by the day. Their pride will prevent them from staying in the EU but what they’ll get in the end will be such a watered down version that it will all have been a pointless exercise in grandstanding.
It will quite possibly turn the UK into the angriest little nation on the planet. The Brexiteers will be furious that real politik foiled their grandiose dreams, while Remainers will be livid with their new ostracisation.
And while some readers may argue that the UK is far from a little nation, it is certain to get smaller as the Scots use Brexit to bail out of the Union.
Who knows what will happen Northern Ireland with the DUP intent on justifying their existence and insisting that Britain really does love them when the opposite has been demonstrated in recent months.
I’m amazed us Irish have been so restrained in our criticism of Brexiteers and the havoc that they are wreaking on our economy.
The recent figures from the ESRI were shocking: even if a hard Brexit is avoided, the cost to the Irish economy over the next 10 years would be €50bn, and 45,000 jobs.
The lads in Anglo Irish Bank were the last crowd to cost the Irish taxpayer tens of billions in wasted money, and they have been rightly pilloried in Irish society.
The Brits have been totally unapologetic for the massive negative impact their actions have already started to have on Ireland Inc. In fact, the opposite is more so the case with Irish politicians being slated by British media and politicians if they have the temerity to even suggest that the Leavers cop themselves on.
I suppose we’ve shown restraint because we know that to speak our minds now will only make the process more painful. But expect a lot of venting from Irish quarters once the divorce papers are signed.
The only possible silver lining is that Brexit is forcing Irish businesses that were traditionally reliant on the UK to look everywhere else to survive. That could finally break the dependence of the Irish economy on the British market and make us stronger long term.
We’ve already seen a lot of evidence of this from the Irish dairy sector. Before Brexit, we depended on offloading nearly one billion litres of the national milk pool into cheddar cheese specifically for the British market. That’s worth nearly €260m annually. A WTO tariff in a hard Brexit would wipe out Irish cheddar sales to the UK overnight by slapping €196m of import taxes onto that amount.
These were figures compiled by IBEC, who also estimate that the least worst outcome in any hard Brexit would be for the Irish dairy industry to shift half of the 100,000 tonnes normally destined for the UK market to everywhere else in the world and divert the rest of the milk into other types of cheeses. This course of action would ‘only’ cost the dairy industry €33m, or the equivalent of about 3c per litre.
Now before you dismiss the notion of millions of Asians ditching their noodles for cheese sandwiches, consider the fact that cheddar exports to Japan have tripled to over 7pc of Ireland’s cheddar exports in the last three years (yes, it has been that long since the Brexit vote).
In a country where rice bars actually exist, it’s heartening to hear that grated cheddar on your bowl of fried rice is now on the menu. Cheddar bombs are also allegedly a trend in South Korea.
Ironically, UK exports of cheddar to Europe have grown strongly in recent years to reach nearly 80,000 tonnes. If we get the boot in the UK, you can be pretty sure that the cheese packs with a Union Jack will make way for the tricolour on the shelves of Carrefour in France and Kaufland in Germany.
You’ll also have noticed that Irish milk processors have invested in pretty much everything bar cheddar since 2016. Dairygold have earmarked €130m to build a new cheese plant at Mogeely to supply Scandinavian markets, along with beefing up it’s powder facilities in Mallow.
Glanbia has started into their own €130m mozzarella plant in Laois, which is designed to pump out up to 50,000t of pizza toppings in a joint venture with US-based Leprino Foods. They have an even bigger investment through another partnership with Dutch company Royal A-ware to build an Edam and Gouda factory at Belview in Waterford.
The new 10,000t infant milk formula factory that opened in Meath this month is another good sign of an industry climbing up the value chain and side-stepping the old reliables.
So the dairy industry has done a lot in the last three years to pivot away from the old reliable of the UK cheddar market.
Contrast this with the beef sector.
Over the same period I’ve seen Irish beef barons make massive investments in their UK processing capacity. ABP has invested over €40m in its facilities, while Kepak have bought out the 2 Sisters Red Meat company with four separate factories.
I can’t see those investments being of any benefit to Irish beef farmers in a Brexit that has no special deal for food imports. A major part of the problem for the beef sector is that once taken out of protected European and British markets, Irish meat is not competitive globally. So it’s not going to suddenly find doors opening in Japanese rice bars or as pizza toppings in China.
The meat bosses know this but just haven’t told anyone yet. They have at least another six months to come up with a plan, but to be honest I wouldn’t be holding my breath.
And if they haven’t actually given up on the Irish beef sector, let them come out and prove it.
Darragh McCullough farms in Meath and presents RTÉ’s Ear to the Ground television programme.