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Meat and dairy processors have welcomed the opportunity to develop new markets outside the UK, following the announcement of a €100m capital investment fund for the sector.
The Capital Investment Scheme for Processing and Marketing of Agricultural Products was announced by Tánaiste Leo Varadkar and Minister for Agriculture Charlie McConalogue on Monday.
Meat Industry Ireland (MII), the representative group of Irish meat factories, said a support fund to diversify the meat processing sector had been a priority for several years in the context of Brexit.
Disruption
An agreement between the EU and UK to maintain a tariff-free trading environment was welcome, it said, but MII warned the sector still faced higher costs and disruption through customs and bureaucracy.
Coupled with the prospect of future UK trade deals with other trade partners, “the battle for shelf space in the UK market” would be greatly increased.
“While we will continue to work to retain the place of Irish meat in the UK supply chain, market and product diversification remain a central strategy for our important meat processing sector” an MII spokesperson said.
Major potential for growth has been identified in the international market. The fund would allow for new investment in processing, packing, refrigeration and logistics for supplying international markets across the globe, MII said.
Dairy
Dairy Industry Ireland (DII), the body representing dairy manufacturers including co-ops, has said the new scheme is timely and would continue to commit to ongoing diversification.
DII analysis suggests Brexit will add an extra 1.58c/l processing cost to the 2bn litres of milk used in the cheddar industry, which is particularly dependent on sales to Britain.
While Britain will remain a key partner for Irish dairy, Brexit will present a competitiveness challenge for the industry.
DII director Conor Mulvihill said: “Irish dairy’s diversification strategy has been developing well in advance of Brexit. This has accelerated since the 2016 referendum, with investments very focused on international cheeses and specialised nutrition.”
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