Belfast Telegraph

Slump in sales for food and drink processing in Northern Ireland

By Margaret Canning

Sales in Northern Ireland's food and drink processing sector fell by 3% to £4.4bn in 2015, latest figures show. It was the first decline for the sector's sales in 15 years, according to the Department of Agriculture, Environment and Rural Affairs (DAERA).

However, DAERA said that provisional figures for 2016 - when the sector was celebrated in a year-long campaign led by Tourism Northern Ireland - put sales only marginally lower, at £4.423bn compared to 2015's £4.424bn.

Despite the fall in sales for 2015, the sector was responsible for a great share in output or gross value added at 2.3% in 2015, up from 0.2%.

The subsectors of beef and sheep meat, milk and daily products, accounted for close to 50% of turnover in 2015 and 2016.

However, beef and sheep meat suffered the largest decrease in sales at £29.6m, while pig meat sustained the next biggest fall at £12.2m.

But the subsectors of drinks, bakeries and fruit and vegetables all added sales of £16.6m, £13.9m and £11m respectively.

Dr Esmond Birnie, senior economist at the Ulster University economic policy centre, said the overall 2015 fall in sales may have been down to the impact of a relatively strong pound on competitiveness.

He said this was also borne out in the fall in sales to the Republic over the period - down 11.3% from £704.3m in 2014 to £624.8m in 2015.

Overall, Great Britain was the most important destination for sales at 47% of the total, while the Republic remained the biggest export market at 14%.

Charlie Kerlin, head of agri-food at business advisory firm Grant Thornton, said the statistics showed the continuing importance of food and drink processing to the economy. But he said deal activity in the market in 2017 could affect the pattern of future sales.

Meat giant Dunbia in Dungannon last year sold its pork processing operation to Cranswick plc, and has also entered a joint venture with Dawn Meats in the Republic for its red meat.

And Linden Foods - part of Fane Valley - has formed a joint venture with ABP for its meat processing.

Mr Kerlin said: "The sector will continue to have to deal with challenges as it tries to grow.

"This year has seen significant deal activity in the local market which may also impact the level of food processing undertaken in our local market in the future."

He also said currency fluctuations would also affect 2016 sales.

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