The European Commission has approved €200m in state aid for the agri-food sector in Ireland, prompting a welcome from Meat Industry Ireland and the food and drink body Food Drink Ireland.

The Commission approved a government scheme to support long-term capital investments in the primary food processing sector. The scheme, which will have a budget of €200m for the period 2020-2025, will take the form of grants and will be open both to SMEs and large companies that process and market agricultural products.

It found that the aid is limited to the minimum necessary and will encourage innovative investments that would not occur in the absence of the public support. Furthermore, the measure will contribute to the EU objectives of ensuring a viable food production and promoting intelligent and sustainable growth, without unduly distorting competition and trade. 

Welcoming the approval, Meat Industry Ireland director Cormac Healy said: “Maintaining our meat processing facilities to world class standards in order to deliver the best customers for Irish meat requires significant ongoing capital investment by processing companies. 

“However, the challenges for the meat sector associated with Brexit, now necessitate even more extensive investment in projects to drive competitiveness throughout processing and to innovate processes and our meat offering to existing and new markets. As well as looking to develop new markets and customers for Irish meat exports, MII members will be making every effort to retain market share for Irish meat in the UK market, an increasingly difficult task in the years ahead.”

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He added that the objective is to enable meat processors to engage in significant investment projects that will tackle competitiveness, assist market diversification, and drive innovation.

Food Drink Ireland director Paul Kelly added: “FDI has repeatedly called for exceptional state aid supports as we face the likelihood of a hard and disruptive Brexit, and a fracture of the Single Market. The Irish agri-food and drink sector is uniquely exposed, presenting a compelling case for exceptional state aid support to minimise the economic fallout and job losses.

“The focus must be on maintaining markets in the UK, developing other markets and ensuring that in the domestic market, companies remain competitive against imports. The scheme must introduce investment aids to support Irish agri-food companies as they invest in enabling technology, plant renewal and expansion, refinancing, market development and innovation to regain competitiveness and must apply across the full range of Annex 1 products.”