Join the real world Ireland and stop bleating about the market when it’s not going your way.
The Food and Drink Industry of Ireland (FDII) was reported in The Grocer to be unhappy with the position that its members found themselves in. It claimed that large retailers were increasingly sourcing products and brands from the UK and bypassing local suppliers. It seems that could force indigenous suppliers out of business and lead to mass lay-offs.
Shane Dempsey of FDII also claimed that suppliers, while struggling to survive, are being forced to fund retailer’s marketing initiatives and promotions.
While I cannot speak with any authority about the Irish industry in general, I can comment on the mushroom industry with acute experience.
Throughout the 1980s and 1990s, the Republic of Ireland’s mushroom industry burgeoned and blossomed to the point where there were almost 1,200 growers in the country, supplying more than a third of the UK market. Their success was based on their ability to produce quality mushrooms and deliver them consistently to UK supermarket customers at competitive prices. They were able to achieve this through the vision and efforts of entrepreneurs such as Ronnie Wilson, Cathal McCanna and Pat Walsh, and through the inherent weakness of the punt and then the euro.
Frankly, they did a great job and are to be applauded - that is the nature of free competition and open markets.
As Ireland prospered, the UK industry gradually collapsed. Despite closeness to market and a “UK-grown” label (consumer loyalty is worth a penny off!), more than 75 per cent of domestic production disappeared over two decades. Names such as Blue Prince, Chesswood, Gateforth Park, Middlebrooks, Shepherds Grove, Lords, Pixie Mushrooms, Shackleford and Pond Chase were lost forever. They were unable to compete with the low cost competition from Ireland and the supermarket demands for them to support marketing initiatives and promotions.
Sound familiar? Exactly. Why should Ireland and Irish mushroom growers be given any special treatment to protect their investment and jobs now, when no such intervention was sought by or given to the UK mushroom industry in the past?
The root of the problem, of course, is not the Irish mushroom growers, it is the politicians. Ireland should never have joined the euro. Almost 40 per cent of the Republic of Ireland’s export earnings derive from the UK or the US - so why box the ability for economic manoeuvre into a corner? It was madness.
Now there is no way out for Irish politicians - certainly UK growers can feel justified in trying to sell anything into Ireland, even if it is mushrooms. Why not? They will certainly have some competitive edges. For example, the minimum wage in Ireland is €9.10 (£8) per hour - if social costs are added in at 20 per cent, the figure rises to about €11 per hour. If converted at the current rate of 95p per euro, this works out at £10.45 per hour, which compares with the UK minimum wage, with social costs added back, of £6.98.
In other words, mushroom picking costs will be 50 per cent more per pound in Ireland than in the UK. This reality will prevail through every industry.
And as for MEP Eoin Ryan asking EU competition commissioner, Nellie Kroes, to investigate why prices in the republic are not reflecting the fall in sterling and to establish if consumers are being “ripped off” - what’s it got to do with him, her or them? That’s the free market, that’s how things work dear (sorry, Mr Winner).
Irish consumers are not stupid - far from it. Let them decide if they are being ripped off or not, with their wallets and choice of where they shop - even if it is Newry.
