Significant supports needed to assist the Food and Drink sector to improve both productivity and sustainability

Significant supports needed to assist the Food and Drink sector to improve both productivity and sustainability

July 08, 2024

Food Drink Ireland (FDI), the Ibec group representing the food and drink sector, has today published its Budget 2025 Submission which calls for supports to improve both productivity and sustainability in Ireland's most important indigenous manufacturing sector.

Paul Kelly, FDI Director said: "High cost levels and cost inflation (labour, energy and commodities) are impacting on margins, competitiveness, and investment decisions. There is an increased need to build resilience against rising costs and wider competitiveness pressures whilst investing heavily in low carbon / resource efficient processes and accelerating digital transformation measures. There should be a focus on support for capital investment, innovation, and skills development to improve cost competitiveness in domestic and export markets. In the absence of any direct supports from Government, these challenges will threaten the financial viability of many low margin food businesses".

"The 2030 sectoral emissions reductions targets (Agriculture - 25%, Industry - 35%) will also require significant government support to assist the food sector in the transition to a low carbon economy in the decades ahead. Dairy, meat and drinks companies are already financially supporting the Signpost Farms initiative to ensure the most carbon efficient raw material supply but also need to invest in manufacturing processes".

"FDI's Budget Submission makes several recommendations to help achieve these aims:

Competitive manufacturing

• Introduce investment aids to support new or expanding exporters investing to grow their markets and looking to transition their operations to lower-carbon technologies.
• Undertake a benchmarking exercise on energy costs and introduce competitiveness subvention where needed.

Competitive people

• Introduce a PRSI rebate based on the number of lower earning workers on a company's payroll and ensure the entry point to the top rate of PRSI remains above the National Minimum Wage.
• Put the growing €1.5bn National Training Fund (NTF) surplus to use including through the introduction of a National Training Voucher scheme for employers.

Competitive trade

• Introduce a State-supported export credit insurance scheme.
• Continued investment in customs and logistic supports.

Competitive innovation

• Introduce a €5 million reformulation fund for the Irish food and drinks sector.
• Introduce a pro-forma R&D tax credit route for SMEs.
• Additional capital funding to extend the capabilities of the National Prepared Consumer Foods Centre.

Sustainable food and drink

• A super deduction capital allowance for business investment in environmental and sustainability related capital investments.
• State supports for decarbonisation across a range of technologies and solutions to meet the ambitious climate targets set out for the sector.
• An exchequer funded operational support to grow biomethane production.
• An extension of the welcome accelerated tax allowances and capital grants for farmers for Slurry Tank Capacity Expansion, and for LESS Slurry Spreading equipment
• Significant investment in dairy calf to beef systems, continued funding of the National Genotyping Scheme and supports for earlier finishing of cattle.
• Supports for the continued development of recycling infrastructure.

The Budget Submission also calls for future increases in excise on consumer products to be ruled out and the avoidance of any further discriminatory taxes on food and drink products.

Download the submission below.

FDI Budget 2025 Submissionpdf | 2193.7 kb

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