DUBLIN: When the British pound dropped 15 per cent against the euro in the wake of the 2016 referendum on leaving the EU, the management at Silver Hill Foods foresaw huge disruption to their business.
It did not work out that way for the Ireland-based food producer and the experience has taught Barry Cullen to be phlegmatic about the overall prospects when Brexit actually takes place in March next year.
The euro-zone company weathered the drop in sterling then and hopes to similarly cope with whatever the eventual change in trading conditions. “We sold the same number of ducks in the UK market last year as we did before. It helps that ours is a premium product and that we are not relying on tiny margins,” he tells The National. “We are being philosophical about Brexit. Everyone is telling us there will not be a hard Brexit and a fallback to World Trade Organisation rules.”
Silver Hill once specialised in producing ducks for London’s Chinatown. Three quarters of its sales were to businesses on the other side of the Irish Sea.
The business has steadily grown beyond its reliance on the British market and now sells to Chinese markets, including sending a shipping container of its product to Singapore every week. “We have reduced our reliance on the UK and we are better prepared for the currency risk. We are fully hedged for currency risk for the rest of the year.”
There are particular difficulties facing Silver Hill beyond the trade and currency factors. As a business just 8 kilometres from the border with Northern Ireland, Mr Cullen describes how their ducks start life in the north but are hatched in the south and then raised in the north before returning to the poultry factory, which is set amid green hills and slate-grey lakes.
The staff live both sides of the border and any customs checks would be disruptive to a working day that starts at dawn. A visit to the region by Robin Barnett, the British ambassador to Dublin, last week sought to reassure businesses that, as stated in the UK prime minister Theresa May’s December deal with Brussels, there will be no “hard border” checks following the departure.
However, the British mainland also acts as a land bridge for Irish trucking shipments to other parts of the euro zone. Mr Cullen worries about delays in sending the company’s product to customers in Germany and France. “Britain must import food. It can’t feed itself but needs to import about 40 per cent of its protein needs. We are hoping there won’t be the same kind of restrictions in our sector as there might be in pharma, technology or finance.”
Just over 130km away in Dublin there is something of a mini-boom for the Irish capital ahead of Brexit. Jobs in finance and services such as legal firms have migrated west into a system that, like Britain, uses English and enjoys a virtually identical common law.
While no longer having to manage an independent currency, the central bank of Ireland (CBI) is expanding its regulatory and supervisory functions. A “For Sale” sign stands outside its former headquarters on Dame St in the heart of the city, and the staff have already moved to a glass-and-steel tower block in Docklands.