Pierce Butler, head of sectors for business banking at Bank of Ireland, outlines the potential impact across different sectors.
Irish manufacturers have enjoyed more than five years of continuous growth, but they’re now looking at how they can overcome the challenges that Brexit might pose.
They’re looking at their supply chains and routes to market: their supplier’s suppliers, and their customer’s customers, how they will be impacted by Brexit, and how they can plan or react accordingly.
The food, farming and beverages sector is likely to be one of the most affected by Brexit. If we look at beef farmers, 50% of exports go to the UK. That’s a very high exposure, and it’s going to be a significant challenge for the sector. Beef farmers are very resilient however, and have overcome challenges and volatility in recent years.
In the dairy sector, there is a wider diversification of markets. 25% of exports go to the UK, and it’s an area where there has been strong growth, driven primarily by strong global demand for dairy produce.
Here, there are opportunities for Irish companies to displace UK suppliers that sell into Ireland. There are going to be challenges where perishable exports are concerned, however.
To mitigate against this, we’ve seen a number of companies invest in frozen storage, or reconfigure their production processes, how and where they produce their products. Other businesses are trying to ensure they will have refrigerated logistics to try and counter any impact of disruption that might arise.
Retail is another sector where business will need to understand their supply chain. Where are their products coming from, and how could there be a disruption as a result of Brexit.
Equally, there may be an opportunity to displace UK retailers, who may have more products coming from or through the UK. So that might give Irish retailers the impetus to target that market.
At Bank of Ireland, we’re here to help and support our customers. There are a number of ways we can do this. If you log on to our new Brexit Hub, you’ll find we have a range of supports available.
But also talk to your Relationship Manager who will be delighted to help. We have a team of 120 mobile Relationship Managers who are out talking to customers at their place of business every day.
By Pierce Butler.