HARVARD EXPERTS HOPEFUL FOR IRISH FOOD SECTOR - Academics from the Harvard Business School have been studying the Irish food and drink industry to develop a plan for the sector. The sector is a major employer, and any problem in the industry is a great problem for the whole country. The food and drink sector is being hit by recession and by euro-sterling fluctuations. It lost 12% in sales last year, and sales already this year have fallen by 5%. Exporters say the industry is in massive crisis.
One of those Harvard academics with a plan is Mary Shelman. She says she is optimistic about the future, despite the challenges facing the industry in terms of competitiveness both in the export and domestic markets. She says world demand for food will grow by 70% by 2050, led mainly by the growth in populations and also increasing incomes in the likes of India, China and the rest of Asia.
Ms Shelman says Ireland is very small in terms of the industry and points out that food giant Nestle has 70 billion Swiss francs in sales every year, while Ireland has €7 billion. She says two big challenges facing the industry are land and water. Ireland has a tiny amount of land but is very fortunate to have a large amount of water, making the country's farming prospects very favourable. She also says that Ireland could learn from New Zealand in terms of more integration and co-ordination from the farmer up to the world's consumers.
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ECB HOLDING KEY MEETING IN LISBON TODAY - All eyes will be on the European Central Bank today as it gets out of Frankfurt to hold its two-day meeting in Lisbon, appropriately enough, as the ratings agency Moody's yesterday said it was likely to downgrade Portugal's credit rating after placing it on a three-month review. While talk had been of no rates changes until next year, the possibility of a rates cut was raised by economists as a possibility yesterday.
Simon Barry, an economist at Ulster Bank, says we are likely to hear some words of encouragement from President Jean-Claude Trichet for the Greeks in terms of what they are trying to do to get their fiscal house in order. He says it may be premature to expect any major policy response at this stage, beyond the huge rescue package which has already been put in place. He says that Mr Trichet may leave the door open to some changes depending on how market conditions evolve from here.
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MORNING BRIEFS - Ireland is not at risk from the fallout of the Greek debt crisis and any potential future hit would be as part of European-wide risk. That is what Finance Minister Brian Lenihan told Reuters in an interview last night. The Minister said Ireland does not have the severe structural problems that some Mediterranean countries have and we would see a 'measurable' return to growth in the last three months of this year. He said the risk of contagion from the Greek fall-out does not extend to Ireland.
*** Greece's aid package worth €110 billion has not calmed market concerns about whether it can sort its problems, and other weaker euro zone nations are suffering too, which is having a knock-on effect on the euro, economic growth and the stock markets. Weakness yesterday included a 1.3% drop for the FTSE in London, the Athens stock market fell almost 4%, while the Spanish market lost 2.3%. Dublin also down by 2%. Overnight US markets were slightly lower. This morning shares in Tokyo are 3% lower, and in Hong Kong down by 1%.
*** A statement ahead of its AGM from building and DIY group Grafton says that January trading was badly affected by bad weather and sales in the month were €25m below the previous January. But trading in the UK, which accounts for over 70% of group turnover, then picked up in each of the following months. And In Ireland, sales continue are below levels achieved in 2009 but the rate of decline has reduced.
*** Having dropped to a 15 month low yesterday, this morning the euro is trading at $1.2815 cents and 84.88 pence sterling.
