A SO-CALLED ‘hard’ Brexit would be a nightmare scenario for many Irish companies, the head of dairy giant Dairygold has said.
The company, one the largest farmer-owned food and dairy ingredients processors in Ireland, sells a major share of its produce into the UK.
It has said on several occasions that the prospect of a ‘hard Brexit’ is a massive threat to Ireland’s agribusiness industry.
Speaking at Bord Bia’s Brexit seminar in Dublin today, Dairygold CEO Jim Woulfe said he has been trying to reassure customers that the company intends to maintain a strong presence in the key market.
“We have two manufacturing sites in the UK. We’ve been working with the customers in the UK, cosying up to them,” he said.
“It’s been about reassurance and saying ‘we’re here long-term, we’ll continue to work with you’. From that perspective we are confident we will grow that business.
“From an Irish perspective, while we’ve diversified from what we were in the 70s and 80s, today 18% of national manufacturing (in the industry) is going into cheddar for the British market.
Nevertheless, Woulfe added that the company has been considering a hard Brexit scenario, something which he said would be “appalling”.
“For us in Dairygold, it’s equivalent to about 30,000 tonnes of cheese. That’s the potential pain that’s really going to impact us.”
A hard Brexit is a scenario in which the UK decides it wants to retain full control over its borders and gives up access to the EU single market and customs upon leaving the European bloc.
It is not known exactly how trading would work, but it is feared that the UK would fall back upon using World Trade Organisation rules when dealing with its former EU neighbours, leading to significant tariffs being imposed on goods traded with Ireland.
Woulfe said: “A hard Brexit scenario is what we’ve been thinking about and that is the appalling scenario that we can’t really get our heads around.
“We’re thinking about the worst, in that we have to diversify, hoping we won’t, but I think one thing that will be clear is that having 18% of Irish (in the industry) depending on one marketplace is high risk.”
Woulfe’s comments echo several other warnings that the Irish food and drink sector could be the industry that may suffer the most in the event of a hard Brexit scenario.