Food Drink Ireland (FDI) has called on Government to introduce measures to keep the sector competitive against the backdrop of Brexit.
The organisation’s Budget 2018 submission also calls for food companies to maintain growth potential against the weakening of sterling.
In order to support businesses, FDI said funding must be provided over a three-year period to help companies trade through any period of disruption, adapt and succeed into the future.
The resources required will be in the region of 5% of the value of current annual export sales to the UK by Irish agri-food – or €600 million over three years.
This would be funded from both government and EU sources to allow the Irish Government to introduce investment aids to support Irish companies invest to regain competitiveness following single market fracture.
The Group said these resources should be available to both exporters and smaller Irish producers which risk being displaced by cheaper UK imports in their home market.
FDI Director Paul Kelly said: “Almost 40% of our food and drink exports (€4.1 billion) go to the UK. Our industry has already been severely impacted by exchange rate exposure, with the value of trade to the UK reduced by €570 million in 2016.
“The continued weakening of Sterling will cause further reductions to the value of exports as well as job losses. Budget 2018 must support our efforts to maintain strong markets in the UK, as well as ensuring that food companies in the domestic market remain competitive against imports and the threat of cross-border shopping.
“To do this we need to keep business costs under control. At a time of such uncertainty, government also needs to avoid ill-considered public health measures such as soft drink taxes and proposals to introduce deposit return schemes for packaging.
“To support the wider food, beverage and hospitality sector, the 9% VAT rate needs to be maintained and alcohol excise reduced by 3.5%.”