Greater ambition in funding supports for food and drink manufacturing needed in Budget 2023

Food Drink Ireland (FDI), the Ibec group representing the food and drink sector, has today published its Budget 2023 submission calling for greater ambition in funding supports for the sector from the Brexit Adjustment Reserve.

Paul Kelly, FDI Director said: “The food and drink sector is deeply resilient but is experiencing severe and unprecedented inflationary pressures across most cost headings due to a combination of macro external factors which include global and domestic supply chain constraints, the war in Ukraine as well as Brexit and Covid-19. While manufacturers may have achieved some cost recovery in the market, this has fallen greatly short of cost inflation as evidenced by the massive increases in energy and commodity costs versus the lower level of food inflation recorded in the Consumer Price Index.

“FDI’s Budget 2023 recommendations are framed to ensure that Ireland’s most important indigenous manufacturing sector can control its cost base whilst also innovating and improving both productivity and sustainability. Greater ambition is required in drawing down Brexit Adjustment Reserve funding for the sector and the Government’s Capital Investment Scheme needs to be increased well beyond €100 million and extended to all food and drink manufacturing sectors.

“To address high levels of energy inflation and deliver large scale emissions reductions in the food processing sector, SEAI supports must be expanded and made more accessible. In addition, the accelerated capital allowances for energy efficient equipment need to be increased to a super allowance of 130%”.

Other recommendations in the FDI Budget 2023 submission include:

  • Introduce a State-supported export credit insurance scheme.
  • Introduce a €5 million reformulation fund for the Irish food and drinks sector.
  • Extend the Foreign Earnings Deduction to more markets.
  • Make the 9% rate of VAT for the Experience Economy permanent.
  • Reduce excise on alcohol products by at least €50 million.
  • Ensure the forthcoming Deposit Return Scheme for beverage containers operates entirely free of VAT both in respect of the deposit itself and the pool of unredeemed deposits.
  • Provide accelerated tax allowances and capital grants for farmers for Slurry Tank Capacity Expansion, and for LESS Slurry Spreading equipment.
  • Government must bring forward their commitment under Ag Climatise to genotype the national herd.
  • Government incentivisation of earlier finishing animals must be forthcoming – recognised in the Climate Action Plan as a key environmental lever for the beef sector.
  • Introduce accelerated capital allowances for advanced manufacturing including computerised/computer-aided machinery and robotic machines.
  • Leverage the €85m Digital Transition Fund to drive further digital transformation across the food and drink sector.
  • Increase the Innovation Voucher value to €10,000.

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