The number of small and medium sized enterprises (SMEs) in the Irish agri-food sector worried about the impact Brexit will have on their business has doubled in the past year, a new survey has found.

Research commissioned by ifac, the farmer accountancy and advisory firm, shows that 42% of SMEs in the Irish agri-food sector are growing increasingly worried about the impact Brexit will have on their business. This figure has doubled from last year’s agribusiness survey by ifac, which showed only 21% of agri-food SMEs were worried about Brexit.

While 42% is a surprisingly low figure given the exposure of the Irish agri-food industry to a no-deal Brexit, the survey findings reflect the relatively low number of agri-food businesses in Ireland that now have a European Union registration and identification (EORI) number (circa 51%), which is needed by businesses that import and/or export goods.

There is still lingering hope among business leaders that a deal will be done at the last minute

According to David Leydon, head of food and agribusiness at ifac, the biggest concerns among agri-food SMEs in Ireland from Brexit are increased costs, the potential of a hard border and loss of sales in the UK.

Despite the growing uncertainty in Westminster and the approaching cliff edge of 31 October, there is still lingering hope among business leaders that a deal will be done at the last minute, said Leydon.

The ifac survey also found that over 40% of Irish agri-food SMEs have a negative outlook due to rising cost and employment pressures as well as the threat of a no-deal Brexit. Just over half of companies surveyed (52%) said they actively invest in R&D work, which is a stubbornly low figure. The average spend on R&D projects is just 3% of turnover.

Amazingly, just 25% of companies surveyed by ifac said they had availed of some level of State support in the last 12 months to help grow their business.

Increasing sales

Despite the uncertainty caused by Brexit for the Irish agri-food sector, ifac’s survey found that almost half of companies reported an increase in sales last year. Almost 20% of companies saw their profit margins widen last year, while 50% reported profit margins at similar levels to previous years.

Added to this, 25% of businesses surveyed by ifac said they plan to recruit new employees in the coming year. However, agri-food SMEs continue to cite a lack of available employees with the right skills and a lack of interest in the roles offered as barriers to growth.

ifac surveyed 200 SME companies in the agri-food sector to compile its 2019 food and agribusiness report.