Fødevarebranchen i både Belgien og Irland scorer i udlandet, da eksporten har udviklet sig til den drivende kraft for salget. Dog står enkelte sektorer over for vanskeligheder.
European football championship 2016
Sector playing field: food industry
![Squad performance Belgium Ireland](https://group.atradius.com/image/squad-performance-belgium-ireland.jpg)
Belgium: mainly scoring at away matches
The general demand situation for the Belgian food sector is benign, especially due to increasing exports. Quality and safety standards as well as process and product innovation are key selling points abroad. Main destinations remain France, Germany and the Netherlands, while exports to the US, Japan and the BRIC countries are increasing (mainly alcoholic beverages and chocolate), providing good growth opportunities. In total, the food sector contributes positively to the Belgian trade balance every year, while domestic sales experienced a modest decrease in 2015.
However, the profit margins of many Belgian food businesses are negatively affected by high energy and labour costs, which mainly affect smaller businesses. Labour costs are more than 20% higher than in France, Germany and the Netherlands, countries which host big competitors. Another issue is volatile commodity prices. Food producers are forced to pass on any price increases to their customers, otherwise their yields would come under even higher pressure.
While dependence on bank finance and gearing of businesses are generally high in the food industry, banks are generally willing to provide credit to the sector.
Ireland: also scoring abroad
The export-driven food sector represents Ireland’s most important indigenous sector employing 50,000 directly, with 180,000 related jobs in farming and support industries.
Ireland continues to be the largest net exporter of dairy ingredients, beef and lamb in the EU, and has recorded increasing demand for its products in 2014 and 2015. Businesses have benefited from the weaker euro exchange rate, mainly against the British pound sterling, which is the main reason why profit margins have increased. Exports amounted to EUR 10.8 billion in 2015. The weaker euro relative to the British pound sterling and US dollar was estimated to be worth EUR 950 million in 2015, a gain which is unlikely to be replicated in 2016. Domestically, the sector benefits from the rebound of the Irish economy and growing consumer confidence.
The sector still suffers from the lack of capital expenditure during the years of recession. While banks still don’t provide sufficient loans to the food sector, the situation is improving.
Players to watch
Belgium
![Positive section icon](https://group.atradius.com/image/positive-section-symbol-small.png)
Beverages is a profitable subsector, which benefits from increasing international demand. 2016 sporting events (the football championship and the summer Olympics) are expected to drive demand.
The dairy segment suffered in 2015 as a result of the abolition of EU milk quotas, but the market is showing signs of stabilisation after a volatile period. Further consolidation in this segment is expected.
![Negative section icon](https://group.atradius.com/image/negative-section-symbol-small.png)
The meat subsector suffers from margin pressure and high competition, while a consolidation process is on-going in this segment. Some meat exporters are negatively affected by the Russian food import ban.
The Russian food import ban has also increased pressure on the fruit and vegetables segment.
Ireland
![Positive section icon](https://group.atradius.com/image/positive-section-symbol-small.png)
Ireland is the largest exporter of powdered infant formula in Europe, currently producing 15% of the total global output.
There is also sustained growth in exports of Irish whiskey which increased 18% in 2015 and is expected to grow further in 2016.
![Negative section icon](https://group.atradius.com/image/negative-section-symbol-small.png)
For the Irish dairy subsector the recent abolition of EU milk quotas and sharply decreasing milk prices have led to a short-term decrease in margins and delays in capital expenditure programmes. The sector still suffers from the lack of capital expenditure during the years of recession.
However, in the long term the lack of quotas is expected to provide new business opportunities for Irish dairy businesses.
Major strengths and weaknesses
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Belgian food industry: strengths
![Strengths icon](https://group.atradius.com/image/strengths-plus-sign_small.png)
Irish food industry: strengths
- Strong export with robust growth rates in markets outside the EU
- Located in the centre of Western Europe
- Leading sector in Belgium for investments, product & process innovation
- High quality of food products
- Skilled workforce and strong commitment to research and development
- Exports expected to grow further, reaching EUR 12 billion by 2020
- The abolishment of EU dairy quotas allows Irish dairy companies to pursue growing global demand for dairy based food ingredients
- Several of the world’s emerging economies are undergoing cultural changes away from ‘starch-based diets’ to ‘protein based diets’, further fuelling the global demand for Irish food products
- Irish consumer confidence is at a ten year high, which is positive for food producers and retailers
![Weaknesses icon](https://group.atradius.com/image/weaknesses-minus-sign-small.png)
Belgian food industry: weaknesses
![Weaknesses icon](https://group.atradius.com/image/weaknesses-minus-sign-small.png)
Irish food industry: weaknesses
- High labour costs compared to other sectors and foreign competition, despite government plans to tackle this issue
- High energy costs compared to foreign competition
- Shortage of skilled staff
- Downward trend in raw material prices can have severe consequences for Belgian farming, growing and cultivating businesses
- Highly dependent on the British market, which accounts for 40% of food exports, making the sector extremely vulnerable to currency volatility
- High level of competition within some sub-sectors
- Irish bank lending is still relatively conservative and access to finance can pose problems for the smaller food businesses
- The industry requires considerable R&D investment
Fair play ranking: payment behaviour and insolvencies
Belgian food industry
On average, payments in the Belgian food sector take around 60 days. However, much longer payment periods are not unusual for very large food businesses with robust market leverage.
Payment experience is average, and protracted payments are not unusual, especially when peak periods lead to liquidity issues for some food businesses.
Non-payment notifications are low, and we do not expect major increases in the coming months.
The level of food insolvencies is average, and a slight increase was noticed in Q1 of 2016. However, no major increases are expected in the coming months.
Irish food industry
Payment duration in the food sector ranges between 30 days and 60 days, depending on the subsector and the customer segment.
Payment behaviour in this sector has been very good over the past 12 months.
The number of protracted payments, non-payments and insolvency cases is low, and is expected to remain stable near the current levels in the coming months.
![football icon](https://group.atradius.com/image/football_small.jpg)
We have scored the credit risk situation/business performance outlook for the food industry in Belgium and Ireland. Now it's your turn to submit a score for the football match on June 18. Join the Atradius Football Championship here. Join the Atradius Football Championship here.