Remarks by the Tánaiste at Pernod Ricard Capital Markets Day

Speech

Pernod Ricard, Capital Markets Day
Old Jameson Distillery, Smithfield, 5 June 2014
Tánaiste Remarks

I would like to thank Pernod-Ricard and Irish Distillers for your kind invitation to join you today.

I am particularly pleased that, for the first time, you have chosen to host your Capital Markets Day in Ireland. You do so at an exciting time for the food and drinks industry here and at a time when confidence is returning to our economy as a whole.

Most of you will be aware of our recent economic history, and of the difficult and painful adjustments and sacrifices which the Irish people have made in order to return our economy to stability and growth.

Since 2008, Ireland has implemented measures to yield a budgetary adjustment of €29 billion, equivalent to 18% of GDP.

We are on course to bring the deficit below 5% of GDP this year and below 3% in 2015. This year we are forecast to have a primary budget surplus for the first time since the crisis began.

This has been an extraordinarily difficult process but I am happy to say that those efforts are paying off and we are well on our way to economic recovery.

We have made a full return to the bond markets, and our debt is rated as investment grade by all major ratings agencies. We have raised €6.5 billion in the bond markets so far this year - more than 80 percent of our total funding target for 2014 - in bond sales which were heavily oversubscribed by investors. Our 10-year bond yields have reached historic lows of below 3%.

Our domestic economy is strengthening. Unemployment has fallen for 24 straight months. 61,000 additional jobs were created in Ireland in 2013. Forbes magazine recently named Ireland as the best country in the world in which to do business.

We are determined to maintain the policies and regulatory environment which have lead over a thousand overseas companies to choose Ireland as their strategic base in Europe. Eight of the top ten global ICT firms, nine out of the top ten global pharmaceutical firms, and all 10 of the largest online companies in the world are now based in Ireland.

Despite difficult global economic conditions, our economy is forecast to grow by 2.1% this year. Export growth has been the major driver of our progress. Irish exports are at an all-time high, significantly higher than the pre-crisis peak in 2007.

Ireland's food and drinks industry is a key part of this success story. The industry now accounts for 8% of GDP and almost 160,000 jobs. Food and drink exports make up two thirds of exports from indigenous Irish companies. The largest export market for Irish food and drink is the UK, followed by Continental Europe. These are traditionally our strongest markets and that is likely to remain the case but we are also very conscious of the need to grow our market share in high growth markets.

That is why, earlier this year, I announced that we are expanding our network of Embassies and Consulates overseas, opening eight new missions to cover new and emerging markets such as Thailand and Indonesia, as well as deepening our relationships in the US by opening a consulate in Austin, Texas.

Our Embassy network plays an important role, in close collaboration with the State agencies, in opening doors for Irish businesses and supporting their expansion into new markets. In each of our priority markets, our Ambassador chairs a local market team consisting of Embassy and State agency staff on the ground, to coordinate that work.

Last year, for example, our Embassy network, in close coordination with the Department of Agriculture, Food and the Marine and Bord Bia, secured access for Irish products to nine international markets with a combined population of 1.5 billion people. This included negotiating the lifting of a ban on beef exports to Japan and opening up access for seafood exports to China.

China is a good example of the growth potential for Ireland in emerging markets. Food and drink exports to China grew by over 40% last year to reach €390 million and have trebled over the last three years. It is now Ireland’s sixth largest food and drink export market overall. This is driven in particular by strong dairy and pork exports but beverage exports are also growing solidly, driven by sales of whiskey.

Sitting here, in this world famous distillery, it would be wrong not to say a few words about the Irish whiskey industry. Irish whiskey, which importantly is a recognised Geographical Indication under the EU spirits regime, is the fastest growing spirit category in the world. Exports grew by 15% last year to €317 million and have increased by 125% since 2009.

Last month, Bord Bia launched its strategy for the craft drinks industry highlighting the importance of celebrating the craft of the industry and communicating collectively the unique proposition that is Irish Whiskey.

Jameson is Ireland’s strongest export brand, accounting for around 3.4 million of the 5 million cases exported annually.
It plays a vital role, not just for Irish Distillers but as an Ambassador for the industry as a whole, as Jameson is more often than not, the first Irish whiskey that international consumers experience.

Over €315 million has been invested in the drinks industry since 2012 and more is planned. Some €200 million of this relates to Irish Distillers alone, with the investment of €100 million in a new distillery in Midleton and another €100 million in a whiskey maturation site in Dungourney Co. Cork.

Irish Distillers has played a leadership role in efforts to grow the sector and I would like to thank you for your continued investment in Ireland.

The Government is committed to supporting the sector and the wider Irish food and drinks industry through our shared strategy, Food Harvest 2020, which has charted a development map to the end of the decade. It recognises the opportunity for the Irish agri-food industry to grow and prosper sustainably through the delivery of high quality, safe and naturally based produce.

As the world seeks to expand food production, sustainability has become a major issue for the global food industry. Building on our green reputation, Ireland aims to become a world leader in the delivery of sustainable food and drink, through a unique initiative called: Origin Green.

Origin Green is a voluntary sustainability programme in which food and drink manufacturers develop a plan with targets in key areas of sustainability, such as emissions, energy, waste, water, biodiversity and Corporate Social Responsibility activities. It is the first of its kind on a nationwide scale.

Irish Distillers was an early Origin Green adopter as one of 10 companies in the pilot phase. In addition, Irish Distillers, Bord Bia and 7 other companies have supported Origin Green Ambassadors, embedding experienced and talented executives with global customers to build trade awareness of Ireland’s Origin Green programme.

Some 338 Irish food and drink companies have registered for Origin Green and the aim is to have 75% of Irish food and drink exports from Origin Green verified members by the end of this year – we are currently at 65% of exports so this ambitious target is very achievable.

We look forward to continuing to work with you to realise that aim and to further grow a sector which is one of our greatest success stories.
Thank you.