For the past two years the threat of Brexit has been forcing fresh produce companies in the UK and Europe to adapt their business models to cope with its most damaging effects. Few sectors have suffered such an immediate and severe blow as the Irish mushroom sector, with several companies going bankrupt as a result of the devaluation of sterling. The reason this particular industry has been so hard hit is its heavy reliance on the UK as an export market. And this seems unlikely to change, with Monaghan Mushrooms saying last month that the country’s producers have no choice but to continue to focus on the British market.
“The UK is going to remain a very important market for Irish mushrooms in particular. We simply can’t ship them anywhere else,” Monaghan chairman Paul Wilson told guests at an event organised by Dublin City University’s Brexit Institute. “The perishable product will not allow you to bring them anywhere else, maybe northern France, but realistically we have to focus on the UK.”
Since Monaghan supplies half of the mushrooms sold at UK retailers, and since Ireland accounts for over a quarter of Britain’s total mushroom imports, it makes sense that rather than searching for new export markets, the Irish mushroom sector is focused on finding ways to export to the UK more cheaply and efficiently. “The past two years have seen producers intensively focusing on reducing costs, improving productivity, increasing scale, adjusting their product mix, and looking for some price increases,” says Bord Bia’s horticulture development and marketing specialist Michal Slawski. “This is to try to cope with sterling-related falls in income and the challenges down the road.”
Sadly, the devaluation of the pound is not the only Brexit factor likely to add cost for Irish mushroom exporters. Post-Brexit, several scenarios could compound the situation, namely the potential need and cost of filing customs documents, the potential for tariffs, and delays caused by the need for additional border checks. The best outcome for Irish mushroom producers, of course, would be the continuation of tariff-free trade and the avoidance of any kind of hard border with Northern Ireland, but in the meantime Slawski stressed that the sector “needs to keep planning for all potential scenarios”.
Bord Bia has been trying to support Irish growers by carrying out Brexit studies, and providing guides and support programmes for the Irish food, drink and horticulture industry over the past two years. These have included a Brexit Barometer, a Currency Risk Management Programme, a Customs and Tariffs Training Programme and a Supply Chain Programme.
Despite the evident challenges that lie ahead for Ireland’s mushroom producers, Slawski remains confident they can weather the storm and continue to be a key supplier to the UK, particularly since Britain has a significant deficit in domestic mushroom supply. “Irish companies have a long history of supplying mushrooms to British retailers, they have a good relationship with them, and the reputation of the quality of Irish Mushrooms is high in the UK,” he says. “Ireland has good geographical proximity to the UK, which gives some advantages over continental suppliers who must transport their mushrooms further. In addition, British producers use a considerable amount of compost imported from the continent so their production costs will rise as well.”
The fact that several major Irish producers, such as Monaghan and Walsh Mushrooms, also have growing operations in the UK, should also help keep down costs. But producers will be mindful of rising competition from major mushroom producer Poland, where labour costs are lower.
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