Industry Leaders Warn of Rising Costs of Doing Business

Leo Crawford, Group Chief Executive

A new survey undertaken with leaders from the Irish food and drinks sectors has shown that while many are happy with the govenment’s economic performance, there is significant concern over the increasing costs of doing business in relation to rates, insurance and the ongoing labour shortage.

The survey was commissioned by wholesaler and retailer BWG Group, and conducted electronically by an independent reseach agency. The survey was conducted over the months of May and June and 53 companies took part, who between them employ thousands of people in Ireland and generate multi-billion euro annual revenues.

56% of respondents were manufacturers and distributors, while 25% were purely manufacturers and the remainder, 19%, were purely manufacturers. 20& were indigenous Irish companies, and 37% employed over 250 people.

The results were presented to over 300 food industry representatives at a briefing, marking the commencement of BWG Foods’ annual trade show.

More than half of survey respondents ranked the government’s performance on housing and health as poor or very poor. Similarly, just 15% of respondents believe the government has performed well in relation to education and childcare. In contrast, the government’s management of Brexit and job creation were ranked as ‘very good’, with its stewardship of the economy rated as ‘good’. The government is seen as doing ‘ok’ in areas including labour market regulation, personal taxation and transport but is seen as having much more to do to encourage returning Irish emigrants.

The research findings also highlight that the industry is optimistic about the outlook for Ireland’s economy, with 91% of respondents expecting their turnover to grow over the next 12 months.

The positive sentiment that is felt across the industry not only relates to future revenue growth but also to employment, with over two thirds of respondents (67%) believing that they will employ more people in 2022, with a further 55% expecting to employ more by 2024. While a smaller proportion (42%) expect to employ more people in 2020, just 2% of respondents feel they will employ fewer staff next year.

That said, respondents also revealed where they see the biggest challenges in the months ahead, calling out rising business costs, followed by price discounting, insurance costs and labour shortages as the key issues that will need to be addressed.

In terms of immediate threats to consumer demand, Brexit remains the number one concern, followed by the increased cost of living and price inflation.

Group Chief Executive of BWG Group, Leo Crawford, commented: “Our suppliers, who represent all the major food manufacturers and distributors operating in Ireland, have provided a frank assessment of the government’s performance, highlighting that while the government is doing well at a macro level, it’s failing to address the fundamental needs of Irish citizens in terms of housing, health and education. If not addressed, the concern is that these issues will undermine the positive momentum that is driving current economic growth and job creation.”

Leo Crawford further commented: “Separately, suppliers have called out increased business costs as their biggest challenge and this mirrors the experience of food wholesalers like BWG and our many independent retailers. We have to avoid a repeat of the past where we eroded our competitiveness through unsustainable increases in the costs of doing business including wages, local taxes and regulation.”

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The Official Publication of the Restaurants Association of Ireland

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