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Brexit upheaval demands EU state aid exemptions

Food and Drink Industry Ireland (FDII), the Ibec group, today said the increased likelihood of a hard and disruptive Brexit, and a fracture of the single market demands a series of exceptions from EU state aid rules for the Irish agri-food and drink sector. In a new report, which set outs the case for exceptional support, FDII called on the Government and the European Commission to put in place a comprehensive package to protect viable businesses and jobs during a potentially fraught Brexit process.

FDII Director Paul Kelly said: "The Irish agri-food and drink sector is uniquely exposed. There is a compelling case for exceptional state aid support to minimise the economic fallout and job losses. Already the currency squeeze is putting intense strain on exporters. This pressure is likely to intensify as the challenges and economic costs of a hard Brexit crystalise. The hardening of EU and UK negotiating positions mean we must plan for a very difficult Brexit process and the high possibility of a divisive outcome."

The report proposes that state aid support should be targeted across three distinct areas:

To justify the exemptions under existing European legislation, the report sets out the unique position and exposure of the food and drink industry. The report highlights:

"The industry is deeply integrated into the wider economy and its broad geographic footprint means the regions are particularly exposed to any shock to the sector. In the short term, the objective must be to put in place mitigating measures to help companies manage their businesses through on-going currency shifts and during exit negotiations. The medium term focus must be on maintaining markets in the UK, developing other markets and ensuring that in the domestic market, companies remain competitive against imports and the threat of cross-border shopping," concluded Mr Kelly.

Monday, 16 January 2017


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