Higher food prices for consumers are here to stay, says Agriculture Minister on trip to boost sales in Japan

Irish Independent

a day ago

Irish consumers have seen food prices rise more than 4pc in the past year, Central Statistics Office data showed in May. That's around three times faster than general consumer inflation.
'We historically had a long sustained period of very low food prices,' Mr Heydon said. 'Farmers will tell you that maybe those food prices were not matching the cost of production, and had put farmers in a very difficult space. We saw a significant increase in farmers' input costs, and the increase in the price of food didn't [initially] catch up.
'That has changed in more recent times, and I think the price of food and beverages is now more reflective of the cost of production, and I think it's unlikely to change.'
He was speaking in Tokyo, where the minister and senior officials from the Department of Agriculture and Bord Bia are on a trade mission looking to expand Irish exports into the world's third largest economy. Mr Heydon had meetings with the Japanese ministers for agriculture and health.
The minister said he was 'very mindful' of cost pressures and pointed to wider actions by Government, including Enterprise Minister Peter Burke, around competitiveness. However, his role as agriculture minister was to open the maximum number of opportunities and markets for Irish food and drink producers, to allow them to get the best possible return.
Only 10pc of the food and drink we produce is consumed at home – 90pc is exported
Food and agriculture represent 40pc of GDP in rural areas, Mr Heydon said.
'Only 10pc of the food and drink we produce is consumed at home – 90pc is exported. It is my job to make sure we get the best possible return for that.'
Under a Japan-EU trade agreement that came into force in 2019, the Asian economy opened up to food imports in exchange for increased EU access for Japanese products, including cars and machinery.
The deal means tariffs on imported Irish dairy and beef, once as high as 40pc, are being gradually eliminated. It was the first trade deal of its kind to include an explicit commitment to make a 'positive contribution' to combat climate change, creating an additional opportunity for eco-friendly products.
Irish food sales to Japan have doubled since the 2019 trade agreement came into effect – though at just €168m last year, it remains a small fraction of Ireland's €19bn food exports.
Cheese accounts for 34pc of Irish food sales in Japan, followed by pig meats (28pc), beef (14pc), fish (10pc) and beverages – including Irish whiskey (6pc).
The market for butter remains restricted through non-tariff barriers, and full access for Irish poultry and cooked meats is under discussion.
Despite its distance from Ireland, Japan represents a significant market opportunity and offers a strategic diversification away from dependence on the UK and US markets, Mr Heydon said.
He said there is a pressing need to diversify with whiskey, due to the impact of US tariffs. The sector is now experiencing 'significant cash flow issues' following a decade of expansion and capital investment. Whiskey is a popular drink in Japan, with domestic producers and Scotch brands serving the market, offering an opportunity for Irish brands to expand.
Japan is already the biggest importer of Irish beef tongue – accounting for around 70pc of the market. As the product is unpopular in Ireland and its immediate markets, this helps maximise the value per Irish beef carcass without adding to the number of animals slaughtered.
Beef tongue is popular in Japan, sliced thin and grilled, and sold by restaurants including the Negishi chain of 49 outlets that serve 100,000 meals a week around Tokyo.
There is also a market for premium steak cuts, with Ireland's leaner, grass-fed beef providing an alternative to the fat-rich wagyu style in which Japanese beef farms specialise.
Local Japanese chefs say the leaner Irish alternative is finding a niche with younger, health-conscious consumers, helping overcome a perception that grass-fed beef is tough.
The push from Ireland includes consumer goods. Keogh's Crisps has struck an agreement with a Japanese partner and is supplying a number of retailers, while Cashel Blue cheese has entered the market under its own branding.
It's about developing relationships, building trust and respect
Bord Bia CEO Jim O'Toole said Japan, along with South Korea, represented a significant opportunity for Irish producers but would take time to develop. Both countries have high levels of disposable income and neither is self-sufficient in food, so they are both often among the top five of global import markets.
For Irish producers, understanding the market cultures and the mechanics of supply chains was vital.
'The business culture is specific and quite formal and Japanese buyers don't do things opportunistically,' Mr O'Toole said. 'It's about developing relationships, building trust and respect, and developing that for an enduring business.'
He sees a market opportunity in fish, as Ireland is already shipping mackerel.
'To the point about the discerning quality demands of Japanese buyers, I know in some processing plants in Ireland, there will be a Japanese person watching to make sure that the specification is fulfilled,' he said.
'So this is not about quick wins. This is about painstaking detail.'