According to a study from the Central Statistics Office (CSO), Brexit has resulted in a significant decrease in food commerce between Ireland and UK.
Food and Agriculture: A Value Chain Analysis revealed that in the first two months of 2021, exports of food and drink items from Ireland to the UK declined by 35%, from €641 million to €418 million, compared to the same time in 2018.
While sales to seven of Ireland’s ten major food and drink markets increased over the time, the reduction in exports to Britain was higher, resulting in a drop in overall food and drink exports, according to the CSO.
Although Britain is Ireland’s largest food and beverage market, its percentage of exports has decreased. In January and February of this year, it accounted for 23% of overall exports, down from 33% in 2018.
However, the numbers reveal that food and drink exports to Northern Ireland grew during the two-month period, indicating that more businesses in the region are utilizing the North as a gateway to the British market. The drop in food exports to the UK might possibly be due to hoarding in the run-up to the UK’s official exit from the EU at the beginning of the year.
Imports from the United Kingdom were hurt much worse by Brexit, according to the CSO research.
Food and drink imports from the United Kingdom to the Republic plummeted by over two-thirds (64%) in January and February this year, from €523 million to €188 million, compared to the same months last year.
According to the CSO data, food and beverage industry contributes roughly €26 billion to the Irish economy each year.
It was estimated that Irish-owned businesses created €9.8 billion of the €25.7 billion total, while foreign-owned businesses created €15.9 billion.
It shows us how Brexit has resulted in a significant decrease in food commerce between Ireland and UK. CSO statistician Michael Connolly commented on the findings, saying, “The early impact of Brexit on this value chain is clearly obvious in the study given today.”
“The importance of the British market as a destination for food and beverage company exports as well as a source of food and beverage imports for the Irish retail sector is undeniable. Despite the fact that the Irish food and drink value chain is largely globalised, there is still a significant concentration of activity with the United Kingdom, which accounts for 23% of exports of these items in January-February 2021, down from 33% in January-February 2018.
“As more data becomes available later this year, it will become evident whether this is a temporary Brexit shock or if the Irish food and drink value chain is actually transitioning away from its reliance on the United Kingdom.”
This situation between the two economies has shown the impact of Brexit. If the decrease in food commerce between Ireland and UK continues, it will force both economies to look for new import and export alternatives to heat up national economies