Ireland’s €1bn-plus thoroughbred breeding industry is bracing itself for a rocky ride following Britain’s decision to leave the EU.

Last year, Ireland exported €267m in bloodstock and it is estimated that Britain accounted for 80% of this figure. Once Britain has successfully disentangled itself from the EU, it will be free to impose tariffs on imports. More immediately, sterling continues to fall against the euro, giving British buyers less spending power at Irish sales.

Brian Kavanagh, chief executive of Horse Racing Ireland, said: “It is not good news for Ireland and for the racing and breeding industry here which is so closely connected with Britain.

There is now potential for Britain to introduce new tax and trade arrangements which could also have an impact on Ireland

“In the short term, there will be significant uncertainty and volatility with the threat of a recession triggering concerns about the spending power of the British customer. The value of sterling has already fallen sharply and a prolonged reduction in its value would reduce the spending power of British bloodstock buyers in Ireland. Britain accounts for over 80% of our export market.

“There is now potential for Britain to introduce new tax and trade arrangements which could also have an impact on Ireland. The implications for the significant number of Irish riders and stable staff who find employment in Britain are also unclear.

“The racing and breeding sectors in Ireland operate on a 32-county basis and, despite a majority in the North voting to remain, there will inevitably be new border arrangements with people and horses moving in and out of the EU every time they cross the border.”

The issue of managing transit through the UK is a major concern

Shane O’Dwyer, chief executive of the Irish Thoroughbred Breeders’ Association, is also very concerned about the new border arrangements. “The ITBA is a 32-county body with breeders who operate an agricultural enterprise on both sides of the border. It is likely that entitlements, such as payments under the EU’s Common Agricultural Policy, would be lost and land in Northern Ireland would come under UK rules.

“The issue of managing transit through the UK is a major concern and will require veterinary seals, customs checks and inspection of horses unless an alternative agreement is reached between the UK and the EU.”

Department working group

O’Dwyer reported that the Department of Agriculture has established a working group to look at the implications of Brexit. “The ITBA is represented on this working group and will bring all industry concerns to the table and ensure they are to the fore in any negotiations which will include minimising any barriers to trade.”

Racing economist John Lynam said that while the long-term impact depends on UK-EU negotiations, there were a number of more immediate effects sure to be felt by Irish breeders.

“Sterling has already weakened and could go down further,” he said. “The market for Irish bloodstock is largely determined in sterling – either by the British buying here or Irish vendors selling in the UK. For example, those who bought foals in Newmarket last December will now find it harder to make a profit.

British racing needs Irish horse

“We have also seen the stock market go down and that will have a negative impact on buyers. A full-blown recession in the UK is a possibility.”

It’s not all doom and gloom, Lynam said. “One big insulating factor is that Middle Eastern buyers are largely unaffected by Brexit and their spending should hold up. It should also be remembered that British racing needs Irish horses. They are trying to increase the number of runners they have and could not survive without Irish horses.

“Another positive is that our prize money is now more attractive to British owners and trainers. This could help Irish Champions Weekend.”

Henry Beeby and Roger Casey, bosses at Goffs and Tattersalls Ireland respectively, believe the bloodstock market will prove resilient. Beeby said: “Uncertainty is never a good thing but I would suggest that the special relationship between Britain and Ireland which has existed for so long will endure.

“As a Scotsman I predict that Scotland will hold a referendum for independence relatively quickly. The margin was 55%-45% last time and it will be a lot closer next time. If the Union breaks up then Northern Ireland could follow.”

Casey said: “While sterling will suffer volatility for a time, it is envisaged that Brexit will take up to three years to actually come into effect and I would urge the industry not to overreact in the interim period. The Irish racing and bloodstock industry has proven itself to be quite resilient and I would suggest that in the longer term this will again prove to be the case.”

Charles O’Neill, chief executive of Irish Thoroughbred Marketing, said: “There is no clear picture as to how trade will be regulated in the coming years - whether we will have border controls, restricted movement and trade tariffs. ITM has great working relationships throughout the UK and we will work with all the relevant bodies in dealing with these challenges as they arise. I have complete faith that, in the longer term, the Irish thoroughbred industry has the resilience and strength to deal with these challenges.”

Brexit: implications for Irish racing and breeding

  • Sterling: A fall in the value of the pound affects British spending power plus Irish vendors selling in Britain.
  • Border: The invisible border with Northern Ireland will become a hard border bteween the Republic and a non-EU country.
  • Recession: A drop in the UK stock market and other economic factors could trigger a UK receission which would also depress British demand.
  • Prize money: Irish prize money looks more attractive to British owners if the euro holds its value.
  • Employment: Doubts over the legal status of the many Irish working in Britain’s equine industry.
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