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Brexit Spurs Ireland to Woo Middle East for Dairy, Meat Sales

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(Bloomberg) — Ireland’s $21 billion food and beverage industry is turning to the Middle East for sales as the U.K., its biggest buyer, prepares to move ahead with Brexit and leave the European Union.

The U.K. accounts for 43 percent of Ireland’s agriculture exports, buying about 1 billion euros ($1.1 billion) each of beef and dairy products a year, Agriculture Minister Michael Creed said Wednesday in an interview in Dubai. Ireland’s biggest markets in the Middle East are Saudi Arabia, at about 135 million euros a year, and the United Arab Emirates, at about 60 million euros, with cheese and other dairy products leading sales in both, he said.

Ireland, an EU member, reached an agreement this week to sell processed, cooked, minced and bone-in beef to Saudi Arabia, Creed said.

No other country is feeling the pressure from the U.K.’s vote to leave the trading bloc more than Ireland. The U.K. is the top destination for the country’s exports including Diageo Plc’s Guinness beer and the Ornua farm cooperative’s Kerrygold butter made from the milk of grass-fed cows. Thirty years of EU quotas that limited milk production ended in 2015, leaving 18,000 Irish dairy farmers to look for new export markets to take in their growing output.

“Trade wars don’t suit us,” Creed said. “Trade missions in the context of Brexit take on an added imperative.”

Western Diets

Ireland wants to boost its agriculture exports to 19 billion euros by 2025 from 11 billion euros in 2016, he said. The Middle East, North Africa and Southeast Asia are attractive because of a growing middle class, Westernized diets and increased consumer spending, he said. China is now Ireland’s second-biggest market for dairy and pork exports, after the U.K.

For Bloomberg Intellligence research on commodities such as milk, click here.

Creed is in Dubai this week after visiting China, Vietnam, South Korea, Singapore, Saudi Arabia, Morocco and Algeria in the last few months, he said. About 90 percent of his nation’s farm output is exported. Its food and beverage industry has annual production valued at about 20 billion euros, said Tara McCarthy, chief executive officer of the Irish Food Board.

“We have identified hot spots around the globe that we see as offering significant potential,” Creed said, highlighting opportunities in areas of the Middle East, North Africa and Southeast Asia.

Ireland hasn’t been able to take advantage of a trade deal it completed in October to export sheep meat to Iran because of difficulties in getting payments out of the country, he said. Iran can be a gateway for sales elsewhere, including Russia, which is currently closed to direct exports of some EU foods, including dairy products, due to sanctions.

“If we can get into Iran, the opportunities for re-export from Iran into other countries are significant,” he said.

To contact the reporter on this story: Claudia Carpenter in Dubai at

To contact the editors responsible for this story: Nayla Razzouk at, Bruce Stanley

©2017 Bloomberg L.P.

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