Annual Report 2005 Bord Bia Irish Food Board

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Bord Bia Irish Food Board

Annual Report 2005

Our Mission

To drive the success of a world class,

Irish food, drink and horticulture industry by providing strategic market development, promotion and information services.

Marketing

Bord Bia works with Irish companies to target routes to market - retail, foodservice or manufacturing.

Our Services

Our services to Ireland’s Food,

Drink and Horticulture industies can be broken down into four key areas.

Promoting

Bord Bia delivers a comprehensive promotional programme designed to communicate the capability of the Irish food, drink and horticulture industry to the trade and to customers.

Informing

Bord Bia is significantly expanding its information capability to provide insight and analysis on the international food and drink markets to its clients.

Developing

Bord Bia offers a range of market development services to companies in the meat, dairy, consumer food, ingredients and drinks, horticulture and small business and speciality food sectors.

Bord Bia Irish Food Board Annual Report 2005

Presentation to the Minister for Agriculture and Food

In accordance with Section 22 of An Bord Bia Act

1994,the Board is pleased to submit to the Minister its Annual Report and Accounts for the 12 month period ended 31 December 2005.

Angela Kennedy

Chairman

Highlights of the Year

4

Food & Drink exports grew by 4% to exceed € 7.3 billion.

4

Meat and livestock exports grew by just under

4% to almost € 2.2 billion, representing 30% of the total food and drink exports.

4

Dairy exports recorded a rise of almost 5% to

€ 1.95 billion in 2005.

4

Beverage exports were the best performing export category in 2005, growing by

7.4% to almost € 1.1 billion.

4

Prepared food exports showed further modest growth in

2005 at almost € 1.54 billion.

4

The Beef Quality Assurance

Scheme, was fully operational under EN45011 standards in 2005.

4

Bord Bia held its fifth

Consumer Food & Drinks

Industry Day. In total 94 clients attended the event representing 66 companies.

4

Bord Bia continued to re-position itself in response to the changing market environment. This involved reconfiguring programmes and re-prioritising resources to better match the opportunities and needs of industry.

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46

51

53

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04

09

43

54

56

57

58

59

60

70

Contents

Export Figures

Regional Highlights

Chairman’s Statement

Chief Executive’s Review

Corporate Statement

Board Membership

Organisation Structure

Report of the Comptroller

& Auditor General

Statement of Accounting Policies

Income and Expenditure Account

Statement of Total Recognised

Gains and Losses

Balance Sheet

Cash Flow Statement

Notes Forming part of the Financial Statements

Marketing Finance Grant

Payments 2005

Bord Bia Irish Food Board Annual Report 2005

Export Figures

Exports of Irish Food & Drink by Sector (

€ m)

Dairy Products & Ingredients

Prepared Foods

Beef

Beverages

Fish

Pigmeat

Poultry

Sheepmeat

Edible Horticulture & Cereals

Live Animals

Total Food & Drink

Amenity Horticulture

2004

€ m

1,860

1,521

1,330

1,016

370

208

247

175

179

120

7,026

16.2

2005 (p)

€ m

1,950

1,535

1,340

1,091

348

238

257

189

226

138

7,312

16.8

% Change

2005/2004

%

+4.8

+0.9

+0.8

+7.4

-6.0

+14.4

+4.1

+8.0

+26.3

+15.0

+4.1

+3.7

Exports of Irish Food & Drink (

€ m)

500

Dairy Products & Ingredients

Prepared Foods

Beef

Beverages

Fish

Pigmeat

Poultry

Sheepmeat

Edible Horticulture & Cereals

Live Animals

0

238

208

189

175

257

247

226

179

138

120

348

370

1000

1,091

1,016

1500

1,340

1,330

1,535

1,521

2005 (p)

2004

2000

1,950

1,860

2 3

2

Regional Highlights

Ireland

The Strategic Network Alliance features leading Irish food and drink manufacturers cooperating in a joint programme with Bord Bia to identify new ways of securing sustainable business in Continental European markets. In 2005, the group completed research highlighting the relative attractiveness of EU markets and potential opportunities for

Irish exporters across markets.

UK

The Foodservice Programme focused on delivering market intelligence and offering opportunities for established suppliers to strengthen their business.

This involved four key account inward buyer itineraries and over 40 buyer presentations. In addition, Bord Bia published two comprehensive directories combined with a series of workshops dealing with the challenge of entering the € 46 billion market.

Russia

A retail promotion featuring chilled beef for the first time was launched by Mary

Coughlan TD, Minister for Agriculture & Food in St Petersburg.

United States

The first ever North/South

Innovation Network was launched in Cornell

University, New York in 2005. The initiative included a week long programme in the US, the objective of which was to look at the issues driving innovation in the US and apply them to the European marketplace.

Europe

In the autumn Bord Bia launched a € 3 million promotional campaign to raise consumer awareness and enhance the image of Irish beef. In total

40 retailers across eight countries with an estimated 100 million customers per week participated.

France

The summer lamb promotion in France was rolled out in 700

Intermarche, Match,

Hyper U and Super U outlets featuring an on-pack promotional offer.

Following the campaign an awareness level of 77% was recorded for Irish lamb.

China

Bord Bia co-ordinated the

Food & Drink Promotional

Programme on the occasion of the official trade delegation led by An

Taoiseach, Bertie Ahern TD.

Bord Bia Irish Food Board Annual Report 2005

Angela Kennedy

Chairman

Chairman’s Statement

We are facing into a period of unprecedented challenge, in a marketing environment that I think will test us beyond anything we have faced up to now. Not only are we talking about fundamental and far reaching change, but change that is taking place at an accelerating pace. What we do now and how we prepare ourselves will determine the degree to which we will succeed in dealing with these challenges.

This Report demonstrates yet again how our industry has performed in another demanding year, the obstacles and opportunities it has had to face and the emerging challenges that it must plan and prepare for.

Despite the ongoing competitive pressure faced by the sector, exports of Irish food, drink and horticulture grew by 4% to over

€ 7.3 billion in 2005. Exports of prepared foods, following a strong performance in 2004, recorded more moderate growth in 2005, rising by just 1% to almost

€ 1.54 billion. This sector, which has the highest long term growth potential, had to cope with strong downward price pressures, increased priced promotional activity, growing competition and further retail consolidation. This was a notable performance in the circumstances by our agri food industry, which is Ireland’s largest indigenous industry. It accounts for

9% of our gross domestic product and

8% of industrial employment. Its regional distribution and low import content further serve to underscore the value of the industry to the total economy. The agri food sector is more important in the Irish context than in any other EU member State. Furthermore, this segment of the national economy is relatively productive, especially in relation to other high profile sectors of the economy.

Undoubtedly a demanding year by any yardstick but this industry has shown yet again its ability to meet challenges, to change and above all to succeed.

The Irish food, drink and horticulture industry has made significant progress over the past decade, establishing itself as Ireland’s leading indigenous industry. Despite this progress, however, significant areas of potential remain to be exploited. For producers and processors with ambition and vision there lies ahead an exciting future, which includes access to, and opportunities in, existing and new markets, advances in processing technology, new product development, new routes to market – there may be challenges and perhaps obstacles on the way, but there are also opportunities.

The long term success and development of the Irish food, drink and horticulture industry will be determined by the ability of its stakeholders to anticipate, identify, interpret and on occasion to further create and respond to markets stimuli in an efficient and effective manner. Influenced by developments in policy, economics, science and consumption patterns and trends, the landscape in which this industry operates is changing rapidly.

This is the context in which we must stay effective and endeavour to be ahead of the curve. This is the background against which we must ensure our strategic relevance so that we are in a position to assist stakeholders identify and capitalise on market opportunities, while at the same time addressing current and future marketrelated challenges. With our focus on the market, Bord Bia has a significant role to play as exemplified in our mission which is

4 5

To drive the success of a world class

Irish food, drink and horticulture industry by providing strategic market development, promotion and information services

Realising our mission will be dependent on our ability to understand the market and to assist the industry respond in those areas where it has, or can, develop a competitive advantage. In order to pursue this mission we have agreed a set of strategic objectives to guide and focus our activities in the period ahead.

Bord Bia has an acknowledged ability for delivering rapid responses and for mobilising its resources effectively. How we change and develop, so that we continue to deliver on this reputation, will determine how our stakeholders see us, and whether we will provide the leading edge capability and value for money that is rightly required of us.

Change is the only constant – we forget this at our peril. As somebody once said “to grow is to change and to be perfect is to have changed often”. Perhaps we can’t promise perfection but we must never stop trying so that what we deliver is cost effective, focused and relevant in the highly competitive ethos in which we operate.

Towards the end of 2004 we undertook a comprehensive strategy review and consultation process, which was completed in 2005. The main headline outcome of this was a significant re-positioning of the organisation, thus substantially enhancing our capacity and capability to serve the needs of our stakeholders and to continually strive to achieve new levels of excellence.

The challenges coming down the tracks are manifold and diverse. The shape of some of them is clear while we have yet to see how others will impact on us. Consumer trends are major drivers of change. We must understand them and be ready. Equally we must be ready to meet the challenges at a global level that will have a major impact on our industry and the way we do business.

The outcomes of the latest WTO round will be profound. We must assess their implications but more importantly we must work to identify the new opportunities that will also be presented and put in place appropriate strategies and programmes.

Recent Bord Bia research confirms that personal health and wellbeing continues to be a dominant driver affecting consumer choice. Convenience and the demand for quick options are catalysts behind a switch from cooking from scratch to using ready prepared ingredients and ready to eat foods.

Snacking and grazing is becoming more prevalent as the place of the traditional three “proper” meals a day declines.

One manifestation of the increased interest in health and wellbeing is a greater propensity to purchase products with natural ingredients, a category in which Ireland ought to be well positioned.

Bord Bia Irish Food Board Annual Report 2005

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Bord Bia is continuing to re-position itself in the context of this rapidly changing and challenging environment. Over the past twelve months we have been re-configuring our programmes and re-prioritising resources in the marketplace to continue to match the opportunities and the needs of industry.

A selection of our priorities and initiatives for 2006 includes

• Official sponsor of the Ryder Cup

• International Speciality Food Forum

• Food Dudes (Schools) Programme

• Food Trade Delegation to India

• The Brand Forum

• Strategic Network Alliance

The Ryder Cup reaches an international audience estimated at 1 billion, making it one of the top three events in the world sporting calendar. Bord Bia will leverage its sponsorship on behalf of industry to raise the profile of “Ireland the Food Island”, attract key international buyers, showcase the best of Irish food, drink and horticulture and integrate with appropriate promotional programmes. It is intended that our association with this major event will re-enforce Irish provenance as a source of the highest quality, naturally based products.

These are just some of the highlights

I want to refer to. They are part of on-going programmes and projects being managed and delivered effectively across the organisation, both by our Head Office and Food Centre staff and by our network of Overseas Offices which give us further capability and presence in the marketplace –

Amsterdam, Chicago, Frankfurt, London,

Madrid, Moscow, Milan, Paris and more recently Shanghai.

While the Annual Report is rightly seen as an accounting for our stewardship, I also value it as an opportunity publicly to say thank you to the many people, both inside and outside the organisation, on whom we rely and who contribute greatly to our success.

It would be difficult if not impossible to articulate the support and encouragement we get from our Minister, Mary Coughlan,

TD, which I personally value very much and for which I thank her. The seal of Ministerial commitment, often in far flung markets, is an invaluable resource enabling us to deliver major projects successfully, but it often comes at the personal sacrifice of adding another major item to an already busy schedule. Like all successful captains, she has a superb team and I value the opportunity to extend our appreciation also to Ministers of State, Brendan Smith and Mary Wallace, to Secretary General,

Tom Moran, and to his officials who guide us and advise us on a daily basis and who give so generously of their time in so many different ways. The same is true of our

Ambassadors and Irish Embassy staff who add so much to our work in the marketplace and who guide us and support us in many ways. We maintain close and fruitful relationships with our stakeholder organisations and we appreciate very

Chairman’s Statement (Continued) much the reciprocal flow of ideas and recommendations that ensure we are tuned into the issues of the day and that they have a ready line of communication to us. Similarly we have built up effective informal working relationships with our colleagues in other Semi-State organisations, and we have also put in place formal working agreements and arrangements.

This gives effect to our strategic objective regarding collaboration with other

State agencies in areas relevant to marketing/market development.

The Board past and present represents a formidable pool of expertise and knowledge for the governance and guidance of the organisation. It is of course a great honour to be appointed to a State Board, but it is also a great obligation and represents a considerable commitment of time and energy. This commitment continues to be given and the organisation and the industry which the Board serves are the beneficiaries. Members serve on

Committees, ad-hoc groups, attend events on behalf of Bord Bia and make themselves available in many different ways. I thank them for their commitment and support.

The Board is assisted by four Subsidiary

Boards which collectively bring together a further pool of talent and expertise from all sectors across our industry, and which complement the work of the Board and assist Bord Bia in the implementation of its programmes. They are an important part of the working and governance of Bord Bia and I thank them also.

Board Committees represent a further call on the members’ time and expertise.

These Committees are an essential part of the governance structure of Bord Bia which assists us in maintaining the highest standards of corporate governance.

There are four Committees - Audit, Strategy,

Remuneration & Pensions and, in the year that is in it, the Board Ryder Cup Committee.

I thank the members for their very important additional contributions. In a demanding governance climate the Chairman and members of the Board Audit Committee have a particularly onerous task and

I thank them for their dedication to it.

The final and perhaps most important part of Bord Bia is our Executive, led by the Chief Executive, on whom we rely to deliver the strategic objectives and manage the organisation efficiently and effectively.

I want to compliment and thank Aidan

Cotter and his team for their continued dedication and commitment and for their support to me personally, which

I greatly value. The scope and content of the workload being carried out by a relatively small staff body continues to amaze. But it is their commitment to quality and excellence that is most impressive of all. On behalf of the Board, Subsidiary

Boards and stakeholders I thank them for bringing us through another successful year.

Angela Kennedy

Chairman

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Aidan Cotter

Chief Executive

Bord Bia Irish Food Board Annual Report 2005

Chief Executive’s Review

Irish food, drink and horticulture exports recorded a robust performance in

2005 in what was a challenging trading environment. The value of exports increased by 4% to just over € 7.3 billion, despite a strong euro exchange rate against sterling and price deflation in major export markets. This was a notable performance in the circumstances by the agri-food industry which is Ireland’s largest indigenous sector, accounting for 9% of Ireland’s Gross

Domestic product and 8% of industrial employment.

Meat and livestock exports grew by just under 4% to almost € 2.2 billion in 2005, representing 30% of the total value of

Irish food and drink exports. Beef exports, which account for two-thirds of total meat and livestock exports, experienced a small increase. All other meat and livestock products also recorded an increase in 2005.

Beverage exports recovered strongly and were the best performing export category in 2005. Total exports from the sector are estimated to have grown by 7.4% to almost € 1.1 billion.

Bord Bia is committed to working with Irish food, drink and horticulture companies to help them differentiate themselves in the marketplace and exploit the opportunities that are part of a dynamic and fast-changing market.

Prepared food exports showed further modest growth in 2005 at almost € 1.54

billion, following a strong performance in the previous year. The sector, which has the highest long-term growth potential for the Irish food industry, had to cope with strong downward price pressures, increased price promotional activity, and growing competition from mainland European suppliers in its largest market, the UK.

Further retail consolidation during the year has accentuated competition in the UK retail sector while growth in grocery sales has also moderated from previous years.

Bord Bia works closely with all sectors of the industry to build strong positions in the marketplace through a range of market development, promotion and information services. The principal initiatives undertaken in 2005 are set out below.

Dairy exports recorded a rise of almost

5% to € 1.95 billion in 2005. Exports were helped by the fact that world dairy prices were at an all time high for much of the year while volumes traded also increased.

Highlights

• Bord Bia co-ordinated the Food & Drink

Promotional Programme, on the occasion of the Official Trade Delegation to China, led by An Taoiseach, Bertie Ahern, T.D.

During the visit, the Minister for

Agriculture and Food, Mary Coughlan,

T.D. signed a Protocol with her Chinese counterpart, providing a framework to allow direct trade in pigmeat between

Ireland and China. Some 19 Irish food and drink companies participated on the programme which featured food seminars in Beijing and Shanghai attended by almost 300 people.

Bord Bia Irish Food Board Annual Report 2005

At the announcement of Bord Bia's Food/Drink/

Horticulture Export Review

2004/05 were Tara McCarthy,

Senior Manager, Consumer

Foods, Dairy & Beverages,

Bord Bia; Aidan Cotter,

Chief Executive, Bord Bia; and Paddy Moore, Chief

Operations Officer, Bord Bia.

Pictured at the launch of

Bord Bia’s marketing initiative for Irish beef in Europe were

Aidan Cotter, Chief Executive,

Bord Bia; Mary Coughlan, TD,

Minister for Agriculture and

Food; and Angela Kennedy,

Chairman, Bord Bia. The € 10 million Irish Beef campaign was designed to build sales in 8,000 retail outlets in the first ever pan-European campaign and to establish the Irish beef brand in the minds of 40 million consumers weekly.

• In the autumn, Bord Bia launched a € 3 million promotional campaign to raise awareness and enhance the image of Irish beef among European consumers.

The campaign featured in-store, on-pack promotional offers and extended across ten EU member states, from the UK to the Czech Republic, involving 40 retailers with an estimated 100 million customers per week. The promotion represents the first stage in a new, coordinated programme to assist the industry consolidate and develop its position in European markets, which now account for 93% of sales, by building a consumer franchise for Irish beef.

• The Strategic Network Alliance features leading Irish food and drink manufacturers cooperating in a joint programme with

Bord Bia to identify new ways of securing sustainable business in Continental

European markets. In 2005, the group completed research highlighting the relative attractiveness among EU markets in the context of the industry’s strengths and capabilities while also highlighting potential opportunities across markets.

• The Food Dudes Programme, which positively changes childrens’ behaviour regarding consumption of fruit and vegetables, was launched during the year. The programme was piloted in Ireland by Bord Bia in 2002/3 with significant increases in the amount of fruit and vegetables consumed by participating children. EU funding together with support from the

Department of Agriculture and Food and from industry has now been secured to extend this programme to 150 primary schools and 30,000 pupils over three years.

• Bord Bia’s Corporate Marketing Services

Department organised 69 events in 2005, including 16 trade exhibitions worldwide.

Growth in opportunities in international markets was evident during participation at SIAL China, IMS Exhibition in Beijing,

IFE Poland and IFE in New Orleans.

• PERIscope 3 was published in 2005.

Originally designed to track the purchasing and eating habits in the

Republic of Ireland, this latest research now also compares consumer attitudes across Britain and Northern Ireland.

Some 3,000 consumers were surveyed and this project was partnered for the first time by InterTrade Ireland and Invest Northern Ireland.

10 11

Chief Executive’s Review (Continued)

• Over one hundred small businesses from the food drink and horticulture sectors applied for assistance from Bord

Bia’s three marketing grants programmes.

A total of € 307,000 in grants was paid under the programmes to companies, which in the main were engaged in the confectionery, chilled dairy products, and prepared meals sectors.

• The Chelsea Flower Show and

The Hampton Court Show succeeded in highlighting top Irish garden designers, contractors and growers. Bord Bia supported the garden designed by Elma

Fenton, which was awarded a silver medal at the Chelsea Show. Bord Bia provided financial support for Oliver and Liat

Schurmann’s garden at The Hampton

Court Show. This design was awarded a silver gilt medal.

• Over 1,800 inquiries from food and drink manufacturers as well as from other interested parties were serviced during 2005. An independent survey commissioned by Bord Bia shows that this service continues to enjoy high satisfaction ratings.

• eXploratory papers, a series of reports based entirely on desk research designed to elicit interest in more substantive projects, were published on the Italian

Foodservice market and on Global

Sourcing .

Bord Bia’s Corporate Marketing

Services Department organised

69 events in 2005, including

16 trade exhibitions worldwide.

• Major market research was undertaken with key multiple and independent retail buyers to identify emerging category opportunities in the growing speciality market in Ireland. Outputs from the research were used to tailor specific approaches to individual retail accounts to obtain new listings for the sector.

• Bord Bia held its fifth Consumer Food

& Drinks Industry Day. This event brings together Irish food, drink and ingredients companies with the purpose of discussing and reviewing market trends. In total,

94 clients attended the event representing

66 companies. This year’s keynote speaker was Mr Mike Coupe, Trading Director of Sainsbury’s. Representatives from

Bord Bia’s network of overseas offices took part and 141 meetings with individual client companies took place.

• Bord Bia held the Ireland the Food

Island Food and Drink Industry Awards.

They were announced at a gala reception in the Mansion House, Dublin by Mary

Coughlan, T.D., Minister for Agriculture

& Food. The Awards were organised by Bord Bia, Food & Drink Industry

Ireland and AIB. The award categories were selected to applaud best practice in specific areas in the industry that are key to its long-term success.

• The small business programme in the UK focused on assisting speciality companies to consolidate existing listings and to develop new business.

This involved in-store promotions and a public relations campaign around Irish speciality companies’ participation in Covent Garden and at The Fine Food Fair in Earl’s Court.

• The focus for the amenity sector was on key plant buyers based in Northern Ireland for whom two inward buyer programmes were organised. The activities and a generally increased emphasis on Northern Ireland have already started to show dividends and these should result in a good uplift in sales to Northern Ireland in 2006.

Bord Bia Irish Food Board Annual Report 2005

Pictured at the launch of Brand

Finance – A practical Guide to

Justifying Marketing Spend at

Bord Bia's Brand Forum were

Maurice Breen, Speaker and

Marketing Director, Magners

Original Irish Cider; Angela

Kennedy, Chairman, Bord Bia; and John Boyle, Channel Market

Manager, Bank of Ireland

Business Banking. The guide provides advice to companies starting a new brand or growing an existing brand.

• As part of a collaborative project between Bord Bia, InterTradeIreland and the Northern Ireland Food & Drink

Association (NIFDA), the first ever

North South Innovation Network was established. The initiative was launched at

Cornell University, New York, and included an executive week-long programme in the US, followed by a networking event in Ireland. The objective was to look at the issues driving innovation in the US and apply the learning to the European marketplace.

• The Bord Bia Brand Forum continued to champion the branded route to market for Irish companies in 2005. Six events were held with keynote addresses from industry leaders including Peter

Sutherland, brand owners including

Bulmers and a number of both Irish and international entrepreneurs.

• The Beef Quality Assurance Scheme which has been accredited by INAB

(Irish National Accreditation Board) to the standard EN45011 was fully operational under these provisions in 2005. The BQAS was implemented with the support of the industry and independent inspections and certification procedures were put in place. The certification of the first farms under the revised BQAS took place in 2005.

• A New Quality Assurance Scheme was introduced in the Horticulture sector for the Prepared Vegetable

Industry and Landscape sectors.

• A retail promotion featuring chilled beef products for the first time was launched by Mary Coughlan, T.D., Minister for

Agriculture and Food in St. Petersburg.

The promotion recognises the developing opportunities in the Russian market which remains the most important international outlet for Irish beef outside of the

European Union.

• The summer lamb promotion in France was rolled out in 700 Intermarché,

Match, Hyper-U and Super-U outlets, featuring an on-pack promotional offer where consumers could avail of holiday and discount hotel breaks to Ireland and France. Cora, Auchan, Carrefour and Casino also participated in the promotion. Market research following the promotion revealed a 77 per cent awareness level of Ireland as a lamb producer, compared to 64 per cent in 2004. Eighty-three per cent of buyers of Irish lamb have a positive image of the quality of meat from

Ireland and 82 per cent of buyers intend to continue buying Irish lamb.

• The Chefs Irish Beef Club, which draws its membership from Michelin star restaurants in the Netherlands, France and the UK and is designed to raise the image of Irish beef in Europe, was supported by a range of media and promotional activities. Bord Bia is also working towards establishing

Clubs in Belgium and Italy.

• The Meat Cuts CD, a directory of Irish meat cuts for trade buyers, was further developed and now incorporates a very extensive listing of offal cuts as well as three new language options – Dutch,

Mandarin and Japanese, bringing the total number of languages to nine.

The CDs have been distributed to

Irish meat processors and to key trade contacts in Europe and Asia.

• Bord Bia continued to develop its activities to leverage sponsorship of the Ryder Cup, by promoting the link with Ireland The

Food Island and with a particular focus on overseas trade promotion. This is the highest profile sporting event ever to come to Ireland and the biggest sponsorship venture Bord Bia has undertaken to date. The high profile event has been incorporated into all Bord Bia programmes for 2006.

12 13

Chief Executive’s Review (Continued)

Receiving the Bord Bia sponsored Feile Bia award at the launch of ‘Georgina

Campbell’s Ireland – the Best of the Best’ guide book were award winner Paul Deevy,

Richard House, Cappoquin,

Co Waterford; Teresa Brophy,

Ireland Market Manager, Bord

Bia; and Georgina Campbell,

Food Writer.

• Promotions of Irish cattle were organised in Spain and Italy to coincide with increasing shipments of weanlings in the autumn. The events attracted prospective purchasers to feedlots already stocking Irish cattle to demonstrate the quality and health benefits of using Irish stock. A new livestock promotional brochure was also prepared and distributed at the open day and forwarded to the 3,000 members of the Spanish Feedlot Association.

The Bord Bia Brand Forum continued to champion the branded route to market for Irish companies in 2005.

• A major consumer promotional campaign themed ‘Beef - Deliciously Convenient’ took place on the Irish market in the autumn. The objective of the campaign was to raise awareness of the flavour, convenience and versatility of beef.

Consumers were encouraged to look for the Bord Bia Quality Mark when buying beef and to choose the beef option on menus in Féile Bia restaurants.

The promotion was targeted at the younger age groups while reinforcing the benefits of eating beef among more mature consumers.

• Bord Bia ran a TV advertising campaign to increase consumer awareness of Féile

Bia and to promote dining in approved establishments. This was followed by a Beef Festival promotion which encouraged consumers to choose beef on the menu in Féile Bia restaurants with the reassurance of knowing the origin of the beef.

The Festival included consumer competitions in Féile Bia outlets.

• Bord Bia and Irish Egg Marketing launched a new campaign to raise awareness that healthy individuals can eat up to seven eggs a week as part of a healthy diet. The campaign began in April and consisted of press and outdoor advertising, a free recipe booklet and promotions that showed how to make delicious meals in minutes with eggs. It targeted consumers and students with the message that eggs are Real Good Fast Food and that

An Egg a Day is OK. Consumers werealso encouraged to look out for the Bord Bia Quality Assurance symbol on the eggs they purchase.

• In September a pilot Healthy Eating

Project was held with UCD Students.

This project ran over a week and included cookery demonstrations, student competitions and distribution of a specially produced recipe and nutrition information leaflet. Eggs were featured on the menus in the campus restaurants and special ‘Omelette Packs’ were promoted through the campus supermarket.

• Distribution was one of the key policy areas the Taste Council focused on during the year. Bord Bia In conjunction with the Taste Council put in place a distribution strategy for small business in Ireland encompassing effective supply chain and key account management.

A number of overseas distribution models were examined to determine their suitability for the Irish market.

Distribution will form a central part of Bord Bia programmes for small food and drink companies going forward.

14 15

Bord Bia Irish Food Board Annual Report 2005

Meat and Livestock

Irish Meat and Livestock Exports (

€ m)

2004

2,080 TOTAL

Of which:

Beef

Pigmeat

Sheepmeat

Poultrymeat

Live Animals

1,330

208

175

247

120

2005

2,162

1,340

238

189

257

138

% Change

+3.9

+0.8

+14.4

+8.0

+4.0

+15.0

Beef

In 2005, Irish beef exports were worth

€ 1.34 billion, marginally higher than the

2004 level, despite a slight drop in volume of 2% to 488,000 tonnes. This reflected a 7% fall in supply that was partly offset by higher carcass weights. Although export meat supply fell, it was steadier, showing that producers are increasingly aware of the requirements of key European customers for a relatively consistent supply of beef throughout the year.

Irish beef increased its share of other EU markets, despite stiff competition, with exports growing by 10%, reaching 191,000 tonnes. This follows a rise of 7% on 2004 and brings the increase in shipments since

2002 to 65%. The largest growth was seen in France where volumes jumped by 20,000 tonnes to reach 44,000 tonnes. Trade was helped by the return of Irish beef to retail outlets following a gap of nine years.

The UK remains the largest export market, accounting for € 750 million with shipments of 260,000 tonnes. Volumes eased slightly on 2004, reflecting the tighter supply situation and better returns from some continental markets. This was matched with stronger UK domestic supplies and a slightly more cautious market overall due to the re-entry of UK cow beef into the market at year-end. There were also increased volumes of non-EU beef on the market. However the partial suspension of imports from Brazil later in the year boosted demand for Irish beef.

The distribution of Irish beef across the UK market continued to strengthen, with around one third - 90,000 tonnes valued at € 300 million – moving directly through the retail sector. This is up 10% on 2004. Processed beef shipments accounted for 65,000 tonnes, marginally below last year’s level.

Shipments to Italy grew by 5% during the year to 42,000 tonnes and exports to the Netherlands remained steady, at 40,000 tonnes.

Scandinavia improved with volumes reaching

38,000, up 9% on 2004. Volumes to other markets such as Spain and Portugal were stable, while sales to the new Member States penetrated the Czech Republic and Poland.

Exports to international (non-EU) markets were 37,000 tonnes for the year, representing a fall of 34% or 20,000 tonnes on 2004 levels. This reflected the continued growth in competition, particularly from

South American suppliers, and the strong euro against the dollar. Russia remained the key international market with 27,000 tonnes in exports and Algeria was the other key non-EU market during the year.

Bord Bia Irish Food Board Annual Report 2005

The Bord Bia Beef Quality

Assurance Scheme now operates to the benchmark standard EN

45011. Pictured marking the certification of the first farmer to the Bord Bia Beef Quality

Assurance Scheme (BQAS) in

Donegal were Raymond Palmer, first certified farmer to BQAS scheme; Mary Coughlan, TD,

Minister for Agriculture &

Food; and Aidan Cotter,

Chief Executive, Bord Bia.

Pictured at the launch of Bord

Bia’s marketing initiative for Irish beef in Europe were Gerard

Brickley, Meat Division Manager,

Bord Bia and Angela Kennedy,

Chairman, Bord Bia.

Looking forward to 2006, the export market for Irish beef should remain strong. Improved cattle supplies will boost production and international sales. Forecasts for beef production in the EU-15 point to a gap of 300,000 tonnes between production and consumption in 2006. Also, most major importing countries are predicting higher beef imports during the year. However, increased cow beef supplies in the UK will reduce demand in that market for imported beef, including Irish beef.

The volume of beef being imported into the

EU-15 stabilised in 2005 at 530,000 tonnes.

Shipments were running four per cent higher to September before easing considerably following the outbreak of foot and mouth in key producing regions of Brazil, which accounts for more than half of the EU’s total beef imports.

The re-emergence of UK cow beef combined with stable EU consumption may also reduce the EU’s import requirement during 2006.

Strong EU beef consumption should provide the basis for stable trading conditionsin 2006. However, the extent of the current EU restrictions on Brazilian beef and suspension of Argentinean exports will largely determine the market returns from Europe. The resumption of UK beef exports also has the potential to increase competition in other EU markets although volumes are likely to be well below historical levels.

With the exception of the UK, most major

EU import markets are expected to have higher import requirements during 2006 which should provide opportunities for

Irish exporters.

The return of UK cow beef to the food chain is expected to reduce UK imports of chilled and frozen beef by 25% or

75,000 tonnes. This will impact on Irish exports. However, the market position held by Irish beef and the reduced presence of South American product is expected to result in Irish exports for the year declining by less than 20,000 tonnes.

16 17

Chief Executive’s Review (Continued)

Japan was the best-performing international market with Irish

In 2006, Bord Bia will continue to assist live animal exporters to grow business in the major mainland European markets.

Bord Bia coordinated Feedlot Open Days in Spain and Italy in 2005 and will extend this programme in 2006.

pigmeat exports rising by 20% to 12,000 tonnes.

Pork and Bacon

The value of Irish pigmeat exports during

2005 increased by over 14% to € 238 million.

This reflects a similar rise in export volumes.

Pictured in Scoil na mBrathar,

North Brunswick Street, Dublin

7 enjoying fruit and vegetables as part of Bord Bia’s Food

Dudes Programme were Mary

Hanafin TD., Minister for

Education; Angela Kennedy,

Chairman, Bord Bia; Mary

Coughlan TD., Minister for

Agriculture and Food; Vincent

Dolan, Secretary, Fresh Produce

Ireland; and Scoil na MBrathar pupils. The programme is being expanded to 150 primary schools nationwide and aims to permanently increase consumption of fruit and vegetables amongst primary school children.

The European Beef Promotion will be rolled out for its second year. It will build on the successful promotion in 2005 when

40 retailers in 10 EU markets, reaching some 100 million consumers participated in a focused promotion, featuring on-pack offers, designed to build sales and loyalty to the Irish beef brand. The clear identification of this beef as Irish affords an opportunity to communicate the story of its distinctive production.

Live Animals

Irish live cattle exports increased by 25% to € 81 million, reaching 185,000 head during 2005, which represents a rise of over

38% in volume on 2004. Trade to mainland

European markets doubled during the year to 147,700 head. This trade was helped by increased demand for veal calves from Holland and greater import demand in Spain and Italy.

The Spanish market remains the principal destination for Irish cattle with exports reaching 50,000 head in 2005, which compares to 21,000 head in 2004. Exports to Italy more than doubled reaching 47,000 head. However, exports to the UK fell by over 40% to just under 28,000 head, with the majority of these destined for Northern

Ireland. Irish live cattle exports are expected to remain relatively strong in 2006. There is likely to be a continuing strong demand for cattle in Spain and Italy and the Dutch market also looks set to remain stable with a steady demand for calves for theveal sector. The key issue for Ireland is the ability of Irish cattle to compete on price with other suppliers. Trade will also be dependent on continued shipping access to Europe, which worked very well in 2005.

The UK and Germany remain the two most important export markets for Irish pigmeat exports, with volumes increasing to an estimated 52,000 and 12,000 tonnes respectively. The UK continues to account for around 50% of shipments. Trade to the UK remained competitive during 2005 reflecting continued competition from Dutch and Danish suppliers. Despite this shipments increased by almost 10% on 2004 levels.

Exports to Continental EU markets performed strongly during the year rising by 26% to 29,000 tonnes. Germany accounted for almost 45% of the total reflecting a steady trade in sow carcasses to the market throughout the year. The EU market remained relatively well supplied particularly in France and Italy where Irish exports showed little change. However, exports to Denmark and Belgium showed some growth.

Japan was the best-performing international market with Irish pigmeat exports rising by 20% to 12,000 tonnes due to an expansion in the range of products

Ireland is selling into Japan. Exports to Russia were significantly down on 2005 levels to an expected 3,000 tonnes in 2005.

The fall in exports to Russia was the result of certification issues encountered with

EU pigmeat at the beginning of the year which have now been resolved. Competition from Brazil and Canada also affected Irish exports to Russia. Exports to the US showed marginal growth, with export volumes amounting to 5,000 tonnes.

Bord Bia Irish Food Board Annual Report 2005

George Dykemans, Dawn

Meats Group, Grannagh,

Co. Waterford; Owen Brooks,

Director, Bord Bia; Paul Nolan,

Dawn Group, Grannagh,

Co. Waterford; and Luc Van der Weëën, Carrefour, Belgium.

Irish pig supplies are forecast to decline by up to 3% in 2006 with export meat plant throughput standing at around

2.54 million head. With EU production levels expected to remain stable throughout the year and preliminary forecasts indicating a slight strengthening in EU prices, the outlook for Irish pig prices remains reasonably positive.

Lamb

Irish sheepmeat exports increased by eight per cent during 2005 to € 189 million.

Increased volumes helped boost the value of exports. The market diversification seen in 2004 was continued in 2005, reducing dependency on the French market, which took an estimated 58% of total shipments.

The outlook for the Irish market is that demand levels are likely to remain reasonably steady. Imports are likely to continue to play a role in meeting demand from both domestic and export customers.

The domestic market is expected to account for around 50% of Irish output in 2006.

Overall production levels grew to 77,500 tonnes for the year, a rise of almost 8% on 2004. Sheepmeat consumption improved in Ireland to exceed 22,000 tonnes on the back of stronger retail sales. Irish sheepmeat exports to France were largely maintained during 2005, reaching 32,700 tonnes with a value of around € 120 million.

Approximately 70% of Irish lamb sold to France is destined for the retail trade with the remaining 30% sold through the wholesale sector.

Bord Bia programmes for 2006 will focus on improving domestic market returns by promoting the Quality Assurance Scheme to pork and bacon carrying the origin mark and further developing new export opportunities in the UK (manufacturing and second tier retail). Bord Bia will once again coordinate the Catering Colleges Pork

Cookery Competition with six Institutes of Technology.

Increased cull ewe supplies lead to a further rise in sales to the UK. This has proven a good market for bone-in and boneless mutton withan estimated 14,000 tonnes shipped for the year as a whole. This is a rise of 17% on 2004 levels. Sales to Sweden,

Denmark and Holland were all strong during

2005, providing good markets for both cuts and carcasses. This complements the cutting of lamb and mutton which increased further during 2005.

18 19

Chief Executive’s Review (Continued)

The retail egg market increased by over 12% in volume and value terms in 2005.

Outbreaks of Avian Influenza, which were confirmed in Turkey, Romania and Croatia in October 2005, had a destabilising effect on the European market. Consumption in a number of EU markets fell by 10-20 per cent for a period, following widespread fears of a human influenza pandemic. The Irish market remained relatively stable and the industry, together with relevant authorities, implemented measures to prevent an outbreak occurring here.

The Irish and French markets remain the most important for Irish lamb and further development of these markets continues to be a priority for 2006.

In France, the consumer promotional offer will be further developed with identified Irish lamb promoted in a wider geographicalspread than previous years.

The ban on Asian imports of poultry meat will continue into the foreseeable future as Avian Influenza continues to be a problem in the region. This will continue to ease the pressure of imports in the domestic market.

Poultry

The value of Irish poultry exports in 2005 increased by an estimated € 10 million to

€ 257 million. Nearly two-thirds of the total poultry exports during the year were made up of processed poultry meats and prepared products. The UK continues to be the main market for Irish poultry exports, accounting for approximately 80% of total exports.

Imports continue to keep the sector very competitive. However, there was a slight fall in imports during 2005 which slightly eased the pressure on the domestic market.

The decline in imports was mainly due to the EU ban imposed on imports from many

Asian markets in 2004, following outbreaks of Avian Influenza. Prices were steady in

2005 but increasing costs, such as oil prices, have kept margins very tight for growers.

Bord Bia has drafted a standard for a turkey quality assurance scheme which will be implemented in 2006 and the bi-annual

Poultry & Egg Conference will be coordinated in conjunction with the industry.

Eggs

The retail egg market increased by over

12% in volume and value terms in 2005.

Driven by a combination of more buyers coming into the market and more frequent purchasing of eggs, sales were estimated at € 53 million and this upward trend is expected to continue. On average, 90% of households buy eggs every two to three weeks which is equivalent to 248 million eggs over a year.

Bord Bia egg promotions focused on building consumer awareness of the recommended daily consumption allowance for eggs and repositioning them as a healthy and convenient meal option. This was achieved through a combination of outdoor and press advertising and press activities.

The campaign also highlighted the Quality

Mark on eggs and what it means.

20 21

Bord Bia Irish Food Board Annual Report 2005

Consumer Foods, Dairy and Drinks

In 2005, combined exports for the consumer food, dairy, ingredients and drink sectors reached almost € 4.6 billion. Strong world dairy markets and increased volumes helped boost the value of dairy product exports by almost 5% to € 1.95 billion in 2005.

Exports of prepared foods, following a strong performance in the previous year grew by just under 1% in 2005 to € 1.54 billion. The sector which has the highest long term growth potential had to cope with strong downward price pressures, increased price promotional activity and growing competition from Continental European suppliers in its largest market, the UK. Further retail consolidation during the year has accentuated competition in the UK retail sector while growth in grocery sales has also moderated by comparison with previous years.

Dairy Food and Ingredients

This category covers dairy products such as butter and cheese, dairy ingredients such as casein, and various other ingredients used in the manufacture of consumer food and drink products worldwide. The rise of almost 5% in the value of exports highlights the generally positive nature of EU and international markets for dairy products and ingredients during much of 2005.

Though international prices generally held strong, there were variations depending on such factors as cuts in CAP supports and subsidies, intervention activity, global demand and supply, and exchange rates. EU exporters benefited from a fall in milk production in Oceania, and in competitiveness from improved exchange rates against the

US dollar and the New Zealand dollar.

As Irish dairy production is geared towards the maximisation of the return from quota controlled milk production, the balance of product mix in 2005 was especially important. For the period from April

1st 2005 to March 31st 2006, Irish milk production is estimated to have come in at around 1% under quota. Within the product mix, butter production for 2005 is estimated to have increased slightly. Estimates also show that production of casein remained at the same level as 2004, and whole milk powder increased by just under 20%. Irish cheese production is estimated to have increased marginally, mainly as a result of reduced milk availability for cheese. Irish production of skim milk powder, which has dropped significantly in recent years, is estimated to have reduced by over 11%, with chocolate crumb also reducing somewhat.

World milk production has continued to increase, with China being a major contributor, followed by India. Their production increased by about 25% and 5% respectively. Both the US and Brazil are estimated to have increases this year of 3% and 7% respectively. Australia will only record around 0.5%, with New Zealand showing a decline of over 3%. EU quota controlled milk production for 2005 is estimated to have come in at around plus

1%, which represents over one quarter of the world’s total milk production.

The strengthening advances in consumer awareness and demand for health, nutritional and functional foods continued to provide growing opportunities for Irish dairy/ingredient companies to increase their export returns through value added ingredients. This continued to be a priority for Bord Bia in 2005, working closely with the industry. We provided up-to-date market information and intelligence through our

Information and Customised Services

Bord Bia Irish Food Board Annual Report 2005

Pictured at Bord Bia's Consumer

Food & Drinks Industry Day at the IMI, Dublin were keynote speaker Mike Coupe, Trading

Director, Sainsburys UK; Mary

Coughlan TD., Minister for

Agriculture and Food; and

Aidan Cotter, Chief Executive,

Bord Bia. Opportunities for

Irish companies to increase their € 250 million trade with Sainsbury’s UK were highlighted at the event. and a specialised Nutrition & Health Claims workshop. Marketing and promotional support and new customer introductions were also provided at industry specific trade exhibitions. These included the Institute of

Food Technologists Show in the US, ANUGA, and Food ingredients Europe.

The continental market remains challenging because of its diversity and size.

However, companies are primarily targeting niche opportunities in selected markets.

In addition, Bord Bia is driving opportunities in higher volume sectors and developing new contacts in the Retail, Foodservice and

Manufacturing sectors, while deepening its relationship with existing European contacts.

Prepared Foods

These foods are defined as products that have undergone further processing and can be sold as intermediate products, into Retail,

Foodservice and Manufacturing. The sector makes up 21% of total food and drink exports accounting for almost € 1.54 billion.

Included in the sector are foods such as, frozen pizza, frozen ready meals, frozen and chilled hand held snacks, prepared vegetables, fruit, confectionery and ambient grocery products.

The key issues facing the prepared foods sector are: price deflation across the sector, the growth of competition from local,

UK and mainland European players into the UK market and difficult trading conditions in mainland European markets.

Margins are continually being squeezed by retailers and by more product being sold under promotion. A key challenge for the companies who operate in this sector, mainly small and medium sized manufacturers, is to innovate supply chains and to develop new routes to market.

For those companies supplying the UK the major challenges are to counter the price competition from domestic UK players and tackle the greater price competition from European competitors.

Frozen Foods

Britain remains the biggest market for frozen foods. Exports of frozen foods were stagnant. This was due to a number of factors including the growth of chilled convenience products, price deflation in the sector, the Sudan 1 scare early in the year and greater awareness of health and obesity issues among British consumers. The main frozen food products exported were pizzas, ready meals and hand held snacks.

Manufacturers are continuing to develop more premium offerings to counter price deflation in the sector. These offerings include bigger pack sizes for a more substantial meal, offering more authentic flavours and catering to the growth in the consumers need for indulgence.

Organics

In 2005 Bord Bia market research estimated that the organic food market in Ireland was worth € 75.3 million. Some € 65.5

million of this market was accounted for by the main retail multiples, while direct sales of organic food amounted to € 5.5 million. Trade channel interviews indicated significant optimism for the continued growth of this market.

22 23

Chief Executive’s Review (Continued)

Pictured at the launch of

National Organic Week with young Eva were Mary Coughlan

TD Minister for Agriculture and

Food; and Aidan Cotter, Chief

Executive, Bord Bia. National

Organic Week was Ireland's first and largest nationwide celebration of organic food and farming. The campaign was designed to raise consumer awareness of organic food and where to buy it.

Organic farming represents the most environmentally friendly agricultural production system, generating alternative food options for consumers with health or environmental concerns.

Confectionery

The confectionery sector is made up of companies supplying products based on chocolate, sugar and flour.

Bord Bia is actively involved in collaborative approaches to the development of the organic sector and market in Ireland and continued to work closely with the

Department of Agriculture and Food National

Steering Group which is fully representative of organic sector stakeholders. Bord Bia also holds the Chair for the Group’s organic sub-committee on marketing – the Organic

Market Development Group (OMDG).

Bakery

Growth in the bakery category is driven by consumer interest in foreign and ethnic breads and willingness to trade up to more premium priced products. Although bread consumption overall is falling in volume terms, there is still continued growth in the revenue generated by these sales.

The standard white bread market segment is contracting in favour of other more exotic varieties. Research undertaken by Bord Bia in the UK in 2005 into the bakery category identified opportunities for artisan, flavoured and healthy breads.

The organic manufacturing sector is at an early stage of development and at present there are only a small number of Irish organic companies of sufficient scale, with established quality product ranges geared to supply the domestic and export market. The whole emphasis at sector level is to develop the supply side, to an extent where there is sufficient volume of raw material and consumer products, to meet domestic demand and eventually develop export opportunities in international markets.

The continued promotion of Ireland as The Food Island, building up a strong association between the natural and wholesome environment of Ireland and the food products/ingredients it provides, fits well for both conventional and organic food. It also offers a distinct point of differentiation in international markets. The emergence of organic food surpluses for export would work to further build confidence with organic buying consumers in foreign markets.

The Organic Market Development Group and Bord Bia were involved in several initiatives in 2005, including: National

Organic Week 2005; Bord Bia / WDC / DAF

National Organic Conference; the National

Production Census 2002; Sector

Development Plans for meat and horticulture; and an Organic Market Channel Study.

In addition, the Bord Bia and Department of Agriculture and Food websites now have dedicated Organics sections.

Innovation is key to the future development of this category, as consumers demand more adventurous offerings.

Chocolate/Sugar

An increasingly sophisticated consumer and the demand for indulgent products have driven a trend towards Super Premium products at the top end of the market, where real value growth has been achieved.

While Britain is the main market for Irish confectionery exports, there is some penetration of continental EU markets and the US.

Bord Bia carried out research on the UK luxury chocolate market in 2005 to fully understand its dynamics in terms of brands, competitors and consumers and to identify potential opportunities for Irish producers.

It was evident from this research that there is a continued consumer desire for indulgence and quality. The challenge going forward will be to bring new products to market, which will exploit increased consumer demand for convenience, snacking, indulgence and authenticity.

Bord Bia Irish Food Board Annual Report 2005

Pictured at the Chelsea Flower

Show 2005 were supermodel

Jasmine Guinness; Elma Fenton and Michael Maloney, Director of Horticulture, Bord Bia.

Ambient Foods

The ambient food sector is comprised of suppliers operating within the cereals, sauces, soups, jams/preserves, condiments, ambient meals and home baking categories.

Mainly occupying leading brand positions in the domestic market, many of the companies within this sector are now successfully exporting. Many have secured notable listings with major multiple retailers in Britain.

The sector is typically dominated by small to medium size manufacturers operating in different channels such as foodservice, co-packing, supply to manufacturing and retail. Though the main export market is

Britain, there has been some penetration in continental EU and into the US in mainly niche, ethnic markets.

In volume terms, cream liqueurs’ share of the UK off-trade is down from 7.4% in

2004 to 6.9% in 2005, with Irish whiskey stable at 0.7% share of volume. Multiple retail grocery outlets continue to take share from the on-trade and drive volume performance. Heavy discounting was a feature of the drinks sector, especially in the lead up to the Christmas holiday period. Exports of malt beer performed very well in 2005, showing an increase of 22% over 2004.

The US is the second most important market accounting for 20% of exports.

It is the largest export market for Irish whiskey and continued to perform very well with sales growth of approximately

21%. Other developing markets such as

Russia and South America reported growth in exports following increased marketing and promotional activities.

Bord Bia has undertaken a number of multiple retailer promotions across categories in the ambient fixture to raise awareness of the availability of Irish food and drink products, and to drive incremental sales.

Beverages

The beverage sector had a very successful year in 2005, with exports recovering strongly over 2004. It was the best performing export category in 2005, with total exports growing by 7.4% to almost € 1.1 billion. The sector includes all alcoholic and non-alcoholic beverages, waters, carbonates and juices manufactured by both multinational owners and indigenous

Irish manufacturers. Cider, beer, spirits and water exports were all up in 2005.

The top export destination for drinks products remains the UK, accounting for approximately 28% of total exports.

However, Irish whiskey and cream liqueurs lost volumes in the off-trade, while US whiskey, vodka and non-cream liqueur markets grew at the fastest rates.

Issues facing the overall alcoholic beverage industry continue to be focused on concerns about responsible drinking, health and lifestyle issues. Also, increased consolidation with the sector resulted in changes in distribution arrangements. Consequently, manufacturers and brand owners invested resources in accommodating these changes during the year. Increased investment in innovation and branding were still key concerns for companies anxious to drive growth in 2006.

Identifying new market opportunities and meeting new industry contacts and buyers is a key focus for the Irish drinks industry.

To assist companies in these activities,

Bord Bia planned a tailored programme of activities for the industry and included participation at international trade shows and conferences such as WSWA Orlando,

Vinexpo, Bordeaux; IMPACT Drinks

Seminar, London; and Tax Free World

Association, Cannes.

24 25

Chief Executive’s Review (Continued)

Pictured at Bord Bia's

Regional Brand Forum in Cashel, partnered by Bank of Ireland

Business Banking, were Tara

McCarthy, Senior Consumer

Food & Drinks Manager, Bord

Bia; Jacqui Marsh, The Butler’s

Pantry; Wilfred Emmanuel-Jones,

The Black Farmer, Devon; and

John Boyle, Channel Market

Manager, Bank of Ireland

Business Banking.

A market study visit was also organised to Bulgaria and Romania in October 2005.

This gave participants the opportunity to learn about these markets and to meet with potential importers and distributors.

As part of the ongoing business development programme with the National Alcohol

Beverage Control Association USA, buyer-supplier events were also held in

Washington, Virginia and North Carolina.

Two events were also hosted by Bord Bia in Dublin and Limerick with these buyers and Irish supplier companies.

Foodservice

The UK Foodservice Programme continued to focus on the twin objectives of delivering market intelligence and offering opportunities for established suppliers to strengthen their business through this channel. Throughout 2005, four inward buyer itineraries were organised with

Compass Group, midlands based Hardy &

Hansons pub group, distributor MJ Baker

Foodservice and contract catering specialist

ISS Eaton. In addition, over 40 buyer presentations by Bord Bia took place throughout the year, which included leading operators like Whitbread, Prêt a Manger and Mitchells & Butler. Covering the market intelligence objective, Bord Bia published two comprehensive directories dealing with the market and also a series of workshops dealing with the challenge of entering the € 46 billion foodservice market.

In Europe, Bord Bia continued with its strategy of actively developing new markets for Foodservice for Irish companies.

In 2005 reports on The Route to Foodservice were compiled for the Swedish and Dutch markets. These included information on the size and structure of the market and profiles of the main distributors. The publication of these reports was supported by market study visits to each respective market which were attended by 21 representatives in total.

Pictured at Bord Bia’s UK foodservice seminar in Dublin were David Mulcahy, Compass

Group UK; Simon Muschamp,

Lakeland Pritchitts and Paul

Donegan, Trade Marketing

Specialist, Bord Bia. The seminar focused on the growing importance of the eating out of home sector in the UK which is valued at over £30 billion per annum. Speakers addressed opportunities for Irish food suppliers in this growing foodservice sector where consumers are now spending more eating out than any of their European counterparts.

26 27

Bord Bia Irish Food Board Annual Report 2005

Small Business and Speciality Foods

The speciality food market continued its strong performance in 2005 and turnover for the sector is estimated at € 475 million, which represents a 10% year-on-year growth.

Key drivers affecting the market included consumer demand for variety, provenance and authentic taste. There is also an increasing awareness about regional and local food, as consumers seek assurance about traceability and the origin of products and how they are produced.

Pictured at the Food Month at Farmleigh in association with Bord Bia were Paul Flynn

The Tannery Restaurant,

Waterford, Aidan Cotter,

Chief Executive, Bord Bia and Mr. Brendan Smith,

T.D, Minister of State at the Department of Agriculture

& Food. Over forty traders participated in the food market.

This growing trend has attracted the attention of multiple retailers as well as the independent specialists who have traditionally dominated the channel.

In addition, the farmer’s market concept has caught the imagination of the public, reflecting changing consumer preferences for fresh local produced foods. There are now over 100 farmer’s markets operating on the island of Ireland. They have encouraged new start-ups for local products and they bring farmers and consumers together to enrich the fabric of rural life in towns and villages throughout Ireland. of Agriculture and Food, highlighting the importance of small food entrepreneurship and their contribution to the local and regional economy.

Bord Bia also continued to work with strategic partners including the Irish Leader

Network and County Enterprise Boards.

Bord Bia joined forces to showcase over

60 speciality food companies at IFEX, a major food exhibition in Dublin which attracts key retail and foodservice buyers.

Bord Bia’s programme of farmers’ markets, in conjunction with the Office of Public

Works (OPW) at Farmleigh, has gone from strength to strength and has now been extended to include other OPW sites around the country. An export dimension was added last year with an All Ireland Specialty Food

Market in Covent Garden in London. This saw over 40 Irish producers north and south coming together to showcase their produce around St Patrick’s Day.

North-South co-operation continued to develop during the year with Northern companies participating in our UK retail and foodservice programme. Co-operation was extended into the market research area which examined changing consumer behaviours and attitudes to food in the UK and Ireland. A joint North-South exhibition was staged at the Fine Food Fair in Earls

Court in London which attracted over

4,000 British and Irish buyers.

Bord Bia continued to deepen its relationship with the sector and extended its small business programme to focus on building marketing capabilities through a series of best practice marketing workshops and seminars throughout the country. A major regional seminar in the North West was held in conjunction with the Department

The work of the Taste Council continued to influence policy during the year and a number of detailed submissions were made to Oireachtas and government committees on the role and importance of speciality foods and their contribution to the rural economy.

28 29

Bord Bia Irish Food Board Annual Report 2005

Horticulture

Bord Bia strongly supported the horticulture industry throughout 2005, a year that held mixed fortunes for the industry. The Business Development programme continued to assist businesses to increase their competitiveness in relation to domestic and foreign markets through various training courses and workshops. It is aimed at nursery growers, landscape contractors and the Golf Superintendents Association. Workshops in 2005 included topics such as Innovation, Debt Collection, Time Management and Leadership Skills, Goal Setting, and a Business to Business Master Class. In addition, two workshops were held for retail and specialist nurseries.

The Business Support Programme continued to provide financial support for companies with projects involving: new market entry; new product development; packaging design and development; and marketing activities.

In 2005, 10 applicants from the amenity sector were granted financial assistance through the Business Support Programme with the majority seeking grants towards marketing their product through brand identity strategies, packaging and website development.

Bord Bia supported the garden designed by Elma Fenton at the 2005 Chelsea

Flower Show. This garden was awarded a silver medal and received substantial

TV coverage both in the UK, and in Ireland.

Bord Bia also provided financial support for Oliver and Liat Schurmann’s garden at the Hampton Court Show. This design was awarded the second highest accolade, a silver gilt medal. These shows succeeded in highlighting top Irish designers, contractors and growers. Our substantial brand coverage also generated great awareness of Bord Bia’s close association with amenity horticulture throughout Ireland.

GLEE, the Garden and Leisure exhibition, is the main trade show for horticulture in the UK and 30 Irish producers were represented at the show in 2005. The GLEE

Show Planner, branded with Horticulture

Ireland and Bord Bia, was distributed to over

70,000 potential show visitors which drew a number of visitors to the stand. Despite the difficult year in the UK and a distinct lack of enthusiasm among many UK exhibitors, the show’s attendance of

25,000 trade visitors matched last year’s visitors and feedback from exhibiting nurseries has been positive.

Bord Bia organised and facilitated a media panel at the Teagasc National Hardy Nursery

Stock Conference which is run annually in association with Bord Bia. This session explored the use of the media to promote the sector. The key message was that the industry is not pro-active enough in using the media to promote itself. The panel included horticultural journalists and media personalities such as Gerry Daly, Helen

Rock and Dermot O’Neill and also Dr Chris

Morash, media expert from NUI Maynooth.

The session was very well received and pointed to promotional opportunities to be exploited.

Bord Bia Irish Food Board Annual Report 2005

Pictured at the launch of two recipe booklets for the speciality food trade in Bord Bia were

Declan Ryan, Arbutus Breads,

Cork, Muiris Kennedy, Marketing

Director, Bord Bia and John

McKenna, Food Writer.

Pictured at the launch of New

Season potatoes in Dublin were

Aidan Cotter, Chief Executive,

Bord Bia; Mary Coughlan TD,

Minister for Agriculture & Food and a young potato fan. Figures released by Bord Bia at the launch indicated consumers were spending € 145.4million on potatoes in retail outlets annually.

Waste and Environmental

Management

Throughout 2005, Bord Bia worked with the Department of the Environment, Heritage and Local Government and various industry stakeholders, including Race Against Waste, the Irish Farm Film Plastics Association and local authorities. The aim was to identify and prioritise some of the more critical waste issues affecting the Irish horticulture Industry.

These issues include the handling of the SMC

Nitrate Directive and initiatives concerning

Race Against Waste.

Horticultural Promotions

EU State Aid Regulations require that marketing supports for the horticulture sector be co-funded by that sector by at least

50% of the total cost. Bord Bia undertook exploratory studies during the year into possible industry funding options.

In follow-up, Bord Bia submitted a report to the Department of Agriculture and Food outlining the future labour skills needs of the horticultural sector. Some of the key recommendations arising from our submission were noted in a Future Skills

Needs report entitled Skills Needs in the

Irish Economy: The Role of Migration.

Over the past four years, Bord Bia has, in association with Macra na Feirme, implemented the Seasonal Horticultural

Workers Scheme (SHWS). The 2005 SHWS programme fulfilled its objectives of ensuring that seasonal labour demands were matched with an adequate supply of suitably skilled labour. The scheme also provided students from Eastern and Central European countries an opportunity to gain practical work experience in the Irish horticultural industry.

As part of the consultation process with industry, a series of meetings were organised with representatives from the fruit, field vegetable, protected crop, mushroom, potato and ornamental sectors.

A total of 220 SHWS students from the

Ukraine and new accession state countries were placed across a variety of horticultural enterprises over an eight month period.

Horticulture Labour Issues

Bord Bia continues to tackle the shortage of labour in the horticulture sector in close collaboration with the Department of Enterprise, Trade and Employment.

Bord Bia participated in discussions on the issue with the Department of Agriculture and Food, Teagasc, Forfás and Department of Enterprise, Trade and Employment.

Promotions

A series of public relations and promotional activities took place nationwide to highlight the availability in store of new season potatoes, British Queen. The campaign included a product launch and photocall with

Mary Coughlan, TD, Minister for Agriculture

& Food, and regional radio competitions.

30 31

Chief Executive’s Review (Continued)

In May 2005, the Irish Potato

Federation hosted the 57th Europatat

Congress in Killarney, with Bord Bia as one of the key sponsors.

A floriculture promotion programme to promote plants and flowers on the home market took place under funding from the EU, the industry and the Department of Agriculture & Food. It contained two main elements: The production of a series of 20

Gardening Leaflets with the support of the

Garden Centre sector; and plant promotion for outdoor plants in collaboration with the Nursery Stock industry.

The Food Dudes Programme positively changes children’s behaviour regarding consumption of fruit and vegetables.

The programme, which was developed in Wales, was piloted in Ireland by Bord Bia in 2002-3 with significant increases in the amount of fruit and vegetables consumed by participating children. Bord Bia applied to the EU commission for funding to extend this programme to a larger number of primary schools and in May 2005 confirmation of funding was received to extend the programme to 150 primary schools over three years. This funding is matched by an equal contribution from national government and the fresh produce industry. The roll-out of the programme commenced in October

2005 and will reach over 30,000 children in the three-year period.

The programme is costing

Ireland, and the Department of Agriculture

& Food 20%. In addition, Fresh Produce

Ireland is covering the costs of providing and delivering the fruit and vegetables to participating schools.

€ 1.2 million in total, of which the EU is providing 50%, the industry 30%, through Fresh Produce

The programme is fully endorsed by the Department of Education & Science which is facilitating its implementation in the selected schools and the in-service training of the in-school co-ordinators.

Bord Bia is co-ordinating and managing the programme. Schools are being selected in consultation with the Department of Education & Science. In 2005, the programme was implemented in 20 schools in Dundalk, Cork City,

Dublin City North and Tralee.

In May 2005, the Irish Potato Federation hosted the 57th Europatat Congress in

Killarney, with Bord Bia as one of the key sponsors. The congress was opened by the Minister for Agriculture and Food,

Mary Coughlan, TD. It boasted an impressive line-up of speakers and was well attended by representatives from all the major

European potato merchants and packers.

This year Bord Bia’s annual college lecture took place in the Salesian College of Horticulture, Warrenstown, as the inaugural David Robinson Memorial Lecture.

It was dedicated to the memory of the distinguished Irish horticulturalist David

Robinson who died last year. Sue Minter,

Director of Horticulture Eden Project, presented a paper on the top 10 plants that have influenced human kind. With an attendance of over 220, the event was well attended by horticultural students, north and south.

Bord Bia Irish Food Board Annual Report 2005

The National Potato Conference was held in

February and organised by Teagasc and the

IFA. It addressed a wide scope of technical and marketing challenges facing the Irish industry. Bord Bia provided sponsorship and attended the event with a trade exhibit.

Amenity Export Programme

While 2005 was another year of unfavourable weather conditions with instability in key UK wholesale markets dampening enthusiasm for Irish grown plants, Bord Bia continued to work with

Irish exporters to maintain export sales levels.

Sponsorship

Bord Bia, under the Horticulture Ireland brand, supported a number of conferences and meetings across the horticultural sector during 2005, such as the European

Landscape Forum, Cork; Teagasc Irish

Hardy Nursery Stock Association; Young

Horticulturist of the Year; Apimondia Ireland

2005 Congress; and the Garden Landscape

Design Association Annual Congress.

Bord Bia was joint major sponsor of

The Kildare Growers Show at Punchestown.

The high profile of the Bord Bia stand, which won the Most Original Stand award, highlighted Bord Bia’s commitment to the

Amenity Horticulture sector and established a firm connection with the industry. It was visited for the duration of the show by existing and new clients with queries in relation to the various amenity quality programmes, the business support scheme and general enquiries.

In 2005 the focus was on key plant buyers based in Northern Ireland for whom two inward buyer programmes were organised.

The first, the Kildare Growers Show provided an excellent shop window to attract potential buyers into the Kildare area where they had the option of visiting nurseries in the locality while viewing nursery stock from across the country at a one-stop-shop in Punchestown. In association with members of the South East Growers Group another group of Northern Ireland buyers were provided with a two day intensive itinerary of nurseries in the South East.

This included visits to a number of Garden Centres.

Both of these activities and a general increased emphasis on Northern Ireland have already started to show dividends, which should result in a good uplift in sales to Northern Ireland in 2006.

A selection of the information leaflets produced for the

‘Gardening, a better lifestyle’ campaign, an initiative by

Bord Bia and funded by Ireland, the EU and the Industry.

32 33

Chief Executive’s Review (Continued)

Mushrooms

The mushroom sector had another challenging year in 2005. The production base has continued to consolidate with a further reduction in the number of producers to less than 160 by year-end. However, existing producers have steadily been increasing output, leading to an increase in scale and improved competitiveness.

Consequently, the value of overall production was only marginally reduced from € 115 million in 2004 to € 110 million in 2005.

The UK market continued to be very competitive particularly in relation to

Dutch and Polish produce. The UK retail sector continues to be the most important market outlet for Irish mushrooms.

It showed volume growth in 2005 but at a reduced value.

Protected Crops

As part of its commitment to increasing the availability of an appropriate range of Plant Protection Products (PPS), Bord Bia liaises with the industry and the Pesticide

Control Service (PCS) of the Department of Agriculture & Food on an ongoing basis.

Arising from direct consultations with the industry and PCS, a number of essential

PPS were approved for extended use in the field vegetable and protected crops sectors. Several other applications were lodged with the PCS and many were prepared during the year.

45-80mm size range – were carried out in five of the main potato growing counties:

Dublin, Meath, Louth, Cork and Wexford.

Together these five counties account for

74% of national production area.

From September to November, 40 potato growers participated in the Bord Bia survey, culminating in a total of 67 individual test digs. The 2005 pre-harvest yield estimates for Kerr’s Pink and Rooster, which account for over 59% of the national production area, were 14.17 tonnes and 16.3 tonnes per acre respectively.

Bord Bia conducted potato research to provide information on consumer attitudes and behaviours to potatoes that will assist in increasing the consumption of potatoes.

Research was based around a series of consumer focus groups on issues pertaining to the role of potatoes and their usage occasions, their role in the context of other carbohydrates, such as rice and pasta, and the status and imagery of potatoes.

In addition to this research, a number of accompanied shopper interviews were undertaken to gauge consumer awareness and understanding of the merchandising needs for the fresh potato category.

Potatoes

The overall potato growing area was reduced by 8-10%. Combined with a return to more average yields per acre, this provided a total production of 420,000 tonnes. This in turn led to a strong market for potatoes from the surplus situation of 2004. For the eighth year running,

Bord Bia in association with Teagasc, has been monitoring yields of main crop potato varieties: Kerr’s Pink and Rooster.

Pre-harvest yield estimates, which are based on marketable yields – tubers in the

Bord Bia hosted an industry workshop for the Irish potato sector in early November.

It had a specific emphasis on how the industry can improve the positioning of fresh potatoes amongst Irish consumers.

Delegates were updated on the Bord Bia market research. The importance and necessity of category management and sales merchandising was also addressed.

The event was well attended by the all sectors of the industry including: Department of Agriculture & Food; Teagasc; the Irish

Potato Merchant Federation; and the IFA.

Bord Bia Irish Food Board Annual Report 2005

Field Vegetables

It was a good growing season for field vegetables with not many surplus products on the market in 2005. The majority of Irish growers are now growing to exact market requirements with very little traditional speculative growing remaining. The severe drought in Spain gave good advantage to Irish growers of early season crops.

Dublin is the most important county involved in the production of field vegetables with 41% of the total field vegetable production area, 41% of the total farmgate value and 29% of the total number of field vegetable growers. Leinster, in general, tends to dominate the sector, having seven of the top eight field vegetable producing counties

(by area).

Bord Bia launched the first of

New Season Strawberries grown by Barney Murray of Co Dublin at Smithfield Fruit & Vegetable

Market. Strawberry sales have almost doubled in the past three years, from € 11.3 million in 2001 to € 20 million in 2004 at retail level.

There was strong demand for all vegetable lines throughout the year with competition amongst retailers intense. Margins and returns have been static in the past few years due to rising costs of labour and inputs. Therefore, many Irish growers have looked to expanding volumes to spread these increasing costs of production.

The main field vegetable crops grown in Ireland are brassicas and root crops accounting for 84% of total field production area. Cabbage (19%) and carrots (17%) are the two most important crops in terms of both production area and farmgate value.

Other field vegetable crops of importance to Ireland include broccoli (13%), Swedes

(11%), cauliflowers (10%) and parsnips (9%).

The total retail market value for all fresh vegetables is € 380.8 million. The breakdown shows: Tomatoes ( € 74 million), carrots

( € 49 million) mushrooms ( € 35.7 million), peppers ( € 33.3 million), onions ( € 26.4

million), broccoli ( € 22 million), lettuce

( € 21.3 million), cabbage ( € 13.9 million) parsnips ( € 11.9 million), and swedes

( € 11.9 million). These items represent the most important fresh vegetables bought by Irish households at retail selling point.

Soft Fruits

Fresh fruit accounts for 45.5% of all household spend on fresh produce purchased in Ireland giving it a total retail market value of € 453.5 million. Apples account for 26% of the total market followed by citrus (18.4%), bananas

(16.2%), grapes (12%), tropical fruits

(7.5%) strawberries (7.1%) and pears

(5.9%). The two main fruit crops produced in Ireland are strawberries and apples each with a household spend of € 118 million and € 32 million respectively.

In 2005, there were 4,267 hectares of field vegetables produced, with an estimated farmgate value of € 57.4 million. This is an increase of 31% since 2002. The number of growers producing field vegetables in

2005 was 238, down from 294 growers in 2002. Growers with the largest production areas account for a significant proportion of the total production area. The top 10 growers (by area) account for 29% of total production area while the top 50 growers account for 70% of total production area.

These larger growers are becoming more specialised, while expanding their production area of crops. Between 2002 and 2005, the top 50 growers increased their total production area by 28%.

Strawberries are the most important crop to Irish fruit growers. The 2005 strawberry season was good from a yield perspective and the sunny summer weather brought excellent consumer demand. However, intense competition between supermarkets resulted in reduced returns to growers.

Irish growers supplying supermarkets were under pressure to supply at competitive rates. The higher labour costs of picking

Irish strawberry crops are putting the industry under pressure from fruit grown in the Netherlands and Eastern Europe.

34 35

Chief Executive’s Review (Continued)

In the lead up to Apimondia

Ireland its president, Mr Philip

McCabe, created a new world record by attracting over half a million bees to himself in Cahir, Co. Tipperary.

The farmgate value of Irish grown apples in 2004 was € 3.8 million. Currently only a few Irish growers sell direct to supermarkets with most selling through direct channels.

International apple markets were in surplus in 2005 due to a market surplus of Southern

Hemisphere fruit. However, Irish eating apples sold well in 2005 due to the introduction by the Irish Apple Growers

Association (IAGA) of a new Celtic Orchards premium branded Irish seasonal red apple range. Bord Bia had provided market research to facilitate the introduction of this range and brand which was made available to all IAGA members. fuelled by TV makeover programmes and the influence of TV celebrities such as Charlie Dimmock and Diarmuid Gavin, appear to be a thing of the past.

While UK plant sales still amount to £2 billion at retail value, garden centres are battling hard to retain market share as more plants are bought through competing outlets such as supermarkets, DIY outlets and direct from cash and carry suppliers to the landscape design trade. Many of the major

British trading nurseries, who had bought considerable quantities from Irish nurseries in the past, are under increasing pressure from mainland European nurseries, many of whom can better supply the range and price points required by their customers.

Average yields were achieved from the cooking apple crop in 2005, mainly as a carryover to the bumper yields achieved from orchards in 2004. Smaller yields were achieved of premium quality apples, which brought about market scarcity later in the apple season.

Amenity Horticulture

2005 proved to be another difficult trading year for hardy nursery stock and the total value of plants exported remained unchanged at € 6.8 million. While a number of nurseries increased their sales effort and achieved small increases this was outweighed by the difficulties encountered by others who were indirectly affected by the ongoing upheaval in the UK wholesale market.

The UK retail market remained flat and garden centre sales were no less affected by the sluggish consumer spending. High yearly increases in sales, which appear to have been

The decline we witnessed in the bulb sector in recent years was halted in 2005 and those remaining growers had their patience and perseverance rewarded with higher yields and slightly better returns achieved for both flowers and bulb sales. Daffodil production in cut flower and bulb sales performed well, with increased yields and prices resulting in improved returns to producers and processors. Foliage sales were 10% higher than 2004.

Small price increases were secured on export markets for Christmas trees and while volumes remained static, a slight increase in overall sales value was achieved.

The reduction in harvesting of lower quality trees is another stabilising factor and overall sales rose to € 5.2 million in 2005.

36 37

Bord Bia Irish Food Board Annual Report 2005

Quality Assurance

The Bord Bia Quality Assurance Programme continues to play a critical role in the market development and promotion of Irish food and horticultural products.

The various quality schemes have been developed with input from all the key stakeholders. The objectives of the scheme are to encourage and promote the implementation of the highest standards at producer and processor level while providing the consumer with additional assurance regarding food safety, origin and the traceability of products.

Quality Assurance schemes are now in place across a wide range of sectors. Expansion to other areas is planned and the upgrading of key schemes to operate under the provisions of the EN45011 standard, which is a growing requirement within the marketplace, is a priority. Currently, schemes exist in the food sector for beef, poultry, pigmeat, eggs and horticultural produce. In the non-food sectors of horticulture, schemes are in operation for the amenity, nursery stock and landscape gardening sectors.

The Bord Bia Quality Assurance Scheme for horticultural producers is accredited to

EN45011 through the National Standards

Authority of Ireland (NSAI) which carries out independent inspection and certification of all participants. Inspections commenced in 2005 for a new scheme for the Prepared

Vegetable Sector. Through the NSAI Bord Bia also facilitated the mushroom export sector to achieve certification to the EUREPGAP and other specific standards required by their market. Also in the horticulture sector a new scheme for the landscape gardening sector was introduced.

The beef quality assurance scheme with the support of the industry was fully operational under the provisions of the standard EN45011 in 2005. During the year

Bord Bia was accredited by the Irish National

Accreditation Board (INAB) to En45011 for the BQAS. Independent inspection and certification procedures were put in place and a central database developed to control, manage and record participants and their status within the scheme. The revised pigmeat quality assurance standard for processors was implemented in 2005 while the producer standard revision was completed during the year. Both of these were revised to satisfy the requirements of the EN45011 standard. The chicken and egg quality assurance schemes continued in 2005, playing an important role in the marketing and promotion of these products within the marketplace.

The Bord Bia Garden Centre Quality

Awards have been instrumental in raising standards within garden centres throughout

Ireland. The aim of the awards has been to set achievable standards for the industry while simultaneously rewarding those centres that consistently strive for excellence.

The main programme had 36 Garden Centres participating. The mentoring programme had 10 participants from the Republic and eight from Northern Ireland. Five star accreditation was achieved for the first time by Arboretum Garden Centre, Co Carlow, which also received the All Ireland Garden

Centre of the year award. This achievement has raised the profile of the programme throughout the country.

Bord Bia Irish Food Board Annual Report 2005

Pictured at St. Petersburg as part of a new programme to develop market opportunities for Irish beef and pork in

Russia’s growing supermarket sector were Mary Coughlan TD.,

Minister for Agriculture and

Food; and Angela Kennedy,

Chairman, Bord Bia. The initiative was carried out in conjunction with meat exporters and Russian importers. Chilled

Irish beef and pork is now sold directly to Russian consumers and identified as Irish.

The Bord Bia Nursery Quality Programme is a voluntary quality assurance scheme designed to assist Irish nurseries to reach best practise in commercial nursery crop production and management systems. It sets out a code of practice for the efficient running of a nursery business and provides a standard against which nursery businesses are evaluated.

In 2005, 25 nurseries participated in the programme with 12 achieving the Quality

Award and six achieving the Certificate of Merit. All who participated felt that the programme has benefited their business.

Féile Bia – Certified Farm to Fork

Féile Bia is a voluntary programme run by Bord Bia for hotels, restaurants, pubs and workplaces. The programme assists food service outlets in providing information to their customers on how the food they are serving is produced and where it comes from. Members of the programme source their meat and eggs from suppliers approved under recognised Quality

Assurance Schemes. Products included in the programme are beef, lamb, pork, bacon, chicken and eggs.

Quality Assurance will continue to be a vital ingredient in developing, maintaining and growing existing and new markets.

The ongoing development of existing schemes towards the EN45011 standard and the introduction of new schemes in key areas will continue to contribute significantly to this effort into the future.

In 2005, Bord Bia ran a TV advertising campaign to increase consumer awareness of what Féile Bia is and to encourage them to eat in approved establishments.

This was followed by a Beef Festival promotion which encouraged consumers to choose beef on the menu in Féile Bia restaurants with the reassurance that they know where it is coming from. The Beef

Festival included local press and radio advertising, articles on Féile Bia members in their local papers and consumer competitions in Féile Bia outlets.

38 39

Chief Executive’s Review (Continued)

Ireland the Food Island

In May, Bord Bia hosted the Ireland the

Food Island, Food and Drink Industry Awards.

They were announced at a gala reception in the Mansion House, Dublin by Mary

Coughlan, TD, and Minister for Agriculture

& Food. The Awards were organised by Bord

Bia, Food & Drink Industry Ireland and AIB.

The award categories were selected to applaud best practice in specific areas in the industry that are key to its long-term success. Previous award winners speak highly of the positive impact such recognition has had on their business. This year’s short listed candidates and the winners were announced across six categories.

The Brand Forum

Bord Bia’s Brand Forum, now in its sixth year, is recognised as the leading authority in food and drink marketing. The forum focuses on insight and branding and has become a unique opportunity for ideas to be exchanged and developed, networking among peers and sharing best practice in brand development and management.

With a loyal following of up to 150 companies, the Brand Forum is instrumental in providing assistance and inspiration to a large cross section of food and drinks companies across Ireland.

The cornerstone of the Forum is the quarterly national events and bi-annual regional events which attract high calibre industry speakers from Irish and international brand leading companies.

The Award for Innovation went to Kepak for its Global Cuisine initiative. Silver Hill was announced as the winner in the Brand

Marketing Award Category. The Award for Corporate Social Responsibility went to C&C Ireland. Michael Carey, Managing

Director, Jacob Fruitfield Food Group was announced winner of the Entrepreneur

Award. Lily O’Brien’s won The Trailblazer

Award for exporting and J&L Grubb’s Cashel

Blue was announced as Winner of the Small

Business Award.

The Brand Forum is widening its influence to encompass the media and academia.

A strengthened public image should ensure that the best of talent among graduates view the food industry as a viable career option.

The focus for the Forum going forward will be to encourage members to actively engage with marketing best practice over and above attendance at Forum events. This is being achieved via the provision of workshops and bespoke brand development services.

The Forum continues to produce its monthly trends bulletin, guides to consumer marketing and a showcase membership directory publication.

Brand Forum is instrumental in providing assistance and inspiration to a large cross section of food and drinks companies across Ireland.

Bord Bia Irish Food Board Annual Report 2005

Event Services

Bord Bia’s Corporate Marketing

Services Department organised 69 events in 2005. This included 16 trade exhibitions worldwide. Continued interest in opportunities in international markets was reflected in participation at SIAL China,

IMS Exhibition in Beijing, International

Food and Drink Exhibition (IFE) Poland and IFE New Orleans. The ‘Ireland the

Food Island’ umbrella brand was used at all international exhibitions with

65 Irish companies participating under the banner in 2005.

Bord Bia organised participation at a wide range of key sectoral shows such as VinExpo

(alcoholic drinks), ISM (confectionery),

FIE (ingredients), IFEX (speciality foods),

Royal Highland (livestock) and GLEE

(horticulture). The meat and dairy sectors participated at the international flagship shows such as Anuga and World Food

Moscow. Bord Bia mounted a joint Ireland stand at Speciality & Fine Food Show in

London in cooperation with Invest NI and also participated with Bord Iascaigh Mhara at the Apimondia Congress in Dublin.

Information Services

Bord Bia commissioned and published a number of significant pieces of research in 2005. Chief amongst these was the third wave of PERIscope (Purchasing and Eating in the Republic of Ireland).

This involved Bord Bia partnering with both

InterTradeIreland and Invest NI. It enabled representative samples in the key markets of the UK and Northern Ireland to be compared with those in the Republic of Ireland on key dimensions of attitudes and habits towards food and drink products. A consumer study was undertaken on snacking and snack foods and a trade study on organic foods was undertaken with funding from the

Department of Agriculture and Food.

Bord Bia also partly funded a project undertaken by the Ashtown Food Research

Centre, Teagasc, on British consumer perceptions of speciality foods. This will be presented at the International Forum in Kilmainham in May 2006.

eXploratory papers, reports based entirely on desk research designed to elicit interest in more substantive projects, were published on the Italian Foodservice market andon Global Sourcing.

A total of 19 food and drink companies participated in the Taoiseach’s trade mission to China from the meat, dairy, drinks and horticulture sectors. Bord Bia organised two seminars in Beijing and Shanghai on the capabilities of the Irish Food and Drinks industry. Factory and store visits were also organised.

Bord Bia also joined the international horticultural trade association, Freshfel in 2005 in order to inform the industry of developments in other markets that may impact it. Over 1,800 inquiries from food and drink manufacturers as well as from other interested parties were serviced during

2005. This service continues to enjoy high satisfaction ratings in an independent survey commissioned by Bord Bia.

In addition, 23 conferences and corporate events were organised including: the first Killybegs Food Forum in Donegal, highlighting local food producers; Bord Bia’s steak bar at the

National Ploughing Championships; the

National Potato Conference; and Food

Awards Gala Dinner. Thirty-one individual itineraries were also organised.

40 41

Chief Executive’s Review (Continued)

Irish Food Board Executive

Program. Cornell University,

June 19-24, 2005.

1st row, left to right: Collette

Wilson, Tara McCarthy, Tara

Mulryan, Lisea Donaldson

2nd row: Michael Hussey,

Elaine Conneran, Loretta

Dignam, Eamon Donnelly,

John Noonan, Eimhin Ni

Chonchuir, Julian Patton

3rd row: Rod Hawkes,

Bill Drake, Michael Hall,

Grant Gilmore, John McCann

4th row: Redmond McEvoy,

David O’Neill, Michael Bell,

James O’Donnell

Marketing Finance

In 2005 Bord Bia operated three marketing grant programmes, each restricted to small and medium sized enterprises. The Marketing

Improvement Assistance Programme grantassisted small business companies dealing with specific products. These included farmhouse cheeses, bio-yogurts, chilled dairy products, jams, edible horticulture and charcuterie. Under the Market Participation

Programme grant recipients were companies engaged in manufacturing other products, mainly confectionery, chocolates, sauces and alcoholic drinks. The Business Support

Programme catered for companies engaged in the amenity horticulture sector wishing to be supported in their marketing activities.

A total of 110 applications for grant assistance were received in 2005. Seventy three companies were paid grants totalling

€ 306,720.

The US element of the programme had an extensive itinerary which afforded participants insights into what is currently hot and not in the US market. It incorporated presentations from Cornell University’s world-class instructors, US supermarkets, foodservice operators and manufacturers.

Plant tours, foodservice outlet and supermarket tours were also a key element.

The objective was to look at the issues driving innovation in the US, the attitudes of

US consumers and the overall trends driving new product development (NPD) in the US.

The visit included four factory visits and presentations on their approaches to NPD.

North South Programmes

Bord Bia, in association with

InterTradeIreland and the Northern

Ireland Food & Drink Association (NIFDA) established the first North South Innovation

Network. The initiative was launched at Cornell University in Ithaca, New York.

This innovation network, consisted of an executive week long programme in theUS provided by Cornell University, with a follow-up networking event in Ireland.

The follow-up session was attended by

12 participants. It aimed to build on the knowledge gained from the trip, apply the learning to the European context and offer a networking opportunity to participants from the 2004 and 2005 visits. The first presentation was on disruptive innovation in adjacent categories to food and drink and examples were given of disruptively innovative ideas that worked along with some that did not. The second presentation was on innovation in food and drink drawing on examples from Europe along with other continents.

Aidan Cotter

Chief Executive

42 43

Bord Bia Irish Food Board Annual Report 2005

Seamus Kenny

Secretary/Director

Corporate Statement

Governance

The Board has adopted the Code of Practice for the Governance of State Bodies 2001 and the provisions of the Code are being implemented. The Board is committed to maintaining the highest standards of Corporate Governance and Best Practice and monitors compliance on an ongoing basis. The Secretary is responsible to the Board for ensuring that procedures are implemented and that relevant legislation, regulations and guidelines are complied with.

Equality

Bord Bia is committed to ensuring equality of opportunity and its personnel and staff development programmes are structured accordingly. Bord Bia endeavours to assist staff in relation to career and personal needs and operates appropriate policies covering such areas as educational programmes, study leave, job-sharing and career breaks.

Bord Bia is also committed to implementing government policy in relation to the employment of disabled people in the public sector. Specific additional provisions were made for disabled visitors in the construction of Bord Bia’s Food Centre. There is a policy on sexual harassment in operation to support and protect the dignity of each person.

Ethics in Public Office

The provisions of the Ethics in Public

Office Act 1995 and the Standards in Public Office Act 2001 are being implemented.

Freedom of Information

Bord Bia is a prescribed organisation under the Freedom of Information Act

(FOI) 1997. The Act established three new statutory rights:

• A legal right for each person to access information held by public bodies;

• A legal right for each person to have official information held by a public body, relating to him/herself, amended where it is incomplete, incorrect, or misleading;

• A legal right to obtain reasons for decisions affecting oneself taken by a public body

Safety, Health and Welfare at Work

Bord Bia is implementing the provisions of

Safety, Health & Welfare at Work legislation, including the preparation and operation of a Safety Statement embracing all matters affecting safety, health and welfare of staff and visitors to Bord Bia’s premises.

Clients’ Charter

Bord Bia has published a Clients’ Charter setting out its commitment to the Principles of Quality Customer Service for Customers and Clients of the Public Sector. The

Charter is supported by an Action Plan and appropriate internal procedures to give practical effect to this commitment.

Energy Efficiency and Conservation

Bord Bia is committed to making every effort possible to be energy-efficient and to operate appropriate conservation and recycling measures.

Bord Bia Irish Food Board Annual Report 2005

Pictured at Bord Bia's End of

Year Brand Forum, partnered by Bank of Ireland Business

Banking, at the Morrison Hotel,

Dublin was Peter Sutherland, former Director General of WTO.

Mr Sutherland addressed Irish

Food & Drink Companies on issues relating to Ireland's position in the Global Economy, the evolution of trade policy and its effect on the food industry in the EU.

Board Responsibilities

Section 21 of An Bord Bia Act 1994 requires the Board to “keep in such form and in respect of such accounting periods as may be approved by the Minister, with the consent of the Minister for Finance, all proper and usual accounts of monies received or expended by it, including an

Income and Expenditure Account, a Cash

Flow Statement and a Balance Sheet and, in particular, shall keep in such form as aforesaid all such special accounts as the Minister may, or at the request of the Minister for Finance shall, from time to time direct and the Board shall ensure that separate accounts shall be kept and presented to the Board by any Subsidiary

Board that may be established by the Board under this Act and these accounts shall be incorporated in the general statement of account of the Board.”

In preparing these financial statements the Board is required to:

1. Select suitable accounting policies and then apply them consistently.

2. Make judgements and estimates that are reasonable and prudent.

3. Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

Board will continue in operation.

4. State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Board is responsible for keeping proper books of account, which disclose, with reasonable accuracy at any time, the financial position of Bord Bia. The Board is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud or other irregularities.

There is an Audit Committee of the Board to which the internal auditor and the external auditor have full and unrestricted access.

Angela Kennedy

Chairman

Aidan Cotter

Chief Executive

Pictured at Bord Bia’s conference on Convenience

Retailing in the British

Market were Stephen Murrells,

Commercial Director, Tesco; and Michael Murphy, Manager,

Bord Bia London. The Bord Bia conference highlighted routes to market for Irish food and drink companies.

44 45

Statement on the System of Internal Financial Control

On behalf of the Board of Bord Bia,

I acknowledge our responsibility for ensuring that an effective system of internal financial control is maintained and operated.

The system can provide reasonable, but not absolute, assurance that assets are safeguarded, transactions authorised and properly recorded and that material errors or irregularities are either prevented or would be detected in a timely period.

• A comprehensive budgeting system with an annual budget which is reviewed and agreed by the Board;

• Regular reviews by the Board of periodic and annual financial reports which indicate financial performance against forecasts;

• Setting targets to measure financial and other performance.

The Board has taken steps to ensure an appropriate control environment is in place by:

• Clearly defining management responsibilities and powers;

• Establishing formal procedures for monitoring the activities and safeguarding the assets of the organisation;

• Developing a culture of accountability across all levels of the organisation.

Bord Bia has an outsourced internal audit function, which operates in accordance with the Framework Code of Best Practice set out in the Code of Practice for the Governance of State Bodies. The work of internal audit is informed by analysis of the risk to which the body is exposed and annual internal audit plans are based on this analysis. The analysis of risk and the Internal Audit plan are endorsed by the Board Audit Committee and approved by the Board. At least annually, the Internal Auditor provides the Board with a report of internal audit activity. The report includes the Internal Auditor’s opinion on the adequacy and effectiveness of the system of internal financial control.

The Board has established processes to identify and evaluate business risks by:

• Identifying the nature, extent and financial implication of risks facing the body including the extent and categories which it regards as acceptable;

• Assessing the likelihood of identified risks occurring;

• Working closely with Government and various Agencies to ensure that there is a clear understanding of Bord Bia goals and support for the Board’s strategies to achieve those goals.

The Board’s monitoring and review of the effectiveness of the system of internal financial control is informed by the work of the Internal Auditor, the Board Audit

Committee which oversees the work of the internal auditor, the executive managers within Bord Bia who have responsibility for the development and maintenance of the financial control framework and comments made by the Comptroller and Auditor

General in his management letter.

The system of internal financial control is based on a framework of regular management information, administration procedures including segregation of duties and a system of delegation and accountability. In particular it includes:

I confirm that in the year ended 31

December 2005 the Board conducted a review of the effectiveness of the system of internal financial control.

On behalf of the Board

Angela Kennedy

Chairman

Bord Bia Irish Food Board Annual Report 2005

Bord Bia - Board

Membership as at 31st December, 2005

Chairman

Angela Kennedy

Co-Founder, Megazyme International

Members

Mr Dan Browne

Managing Director,

Dawn Meats (Grannagh) Ltd.

Mr Ray Carolan

Pig producer and cattle breeder

Dr Noel Cawley

Managing Director, The Irish Dairy Board

Mr Kieran Dunne

L & K Dunne Nurseries

Mr Joseph Hyland

Managing Director, Irish Country Meats

Mr John Malone

Former Secretary General,

Department of Agriculture & Food

Ms Katherine O’Leary

Dairy Farmer and Part-Time

Home Economics Teacher

Mr Pat O’Rourke

President, Irish Creamery Milk

Suppliers’ Association (ICMSA)

Ms Gina Quin

Chief Executive,

Dublin Chamber of Commerce

Ms Bríd Rodgers

Former Minister for Agriculture,

Northern Ireland

Chief Executive

Aidan Cotter

Secretary/Director

Seamus Kenny

Changes during 2005

Term of Office Expired

25 January 2005:

Mr Philip Lynch, Chairman IAWS Group

Mr Michael Dowling,

Company Director, Visiting Professor

UCC & Head of Agri Strategy AIB

Mr Denis Lucey,

Director IAWS Group

Mr Joseph O’Sullivan,

Chief Executive, Drinagh

Co-Operative Society Ltd.

Appointed 2 February 2005:

Ms Angela Kennedy

Mr Ray Carolan

Mr Joe Hyland

Mr John Malone

Term of Office Expired

5 December 2005:

Ms Marian Byrne,

Principal Officer, Department of Agriculture & Food

Mr John Dillon, ex-President, Irish Farmers’ Association

Mr Michael Kilcoyne,

Chairman, Consumers’ Association of Ireland

Mr Dan Lenihan,

Managing Director, Cobb Ireland

Changes during 2006

Resigned 27 January 2006:

Mr Pat O’Rourke

Appointed 1 February 2006:

Ms Marian Byrne (re-appointed)

Mr Jackie Cahill, President ICMSA

Mr Mel O’Rourke, Sylvan Ireland

Mr Michael Kilcoyne (re-appointed)

Term of Office Expired 8 July 2006:

Dr Noel Cawley

46 47

Consumer Foods Board

Membership as at 31 December 2005

Chairman*

Mr John Malone

Ex-Secretary General,

Department of Agriculture & Food

Members

Mr John Barry

Company Director

Mr Michael Carey

Managing Director, Jacobs Fruitfield Group

Mr Tom Corcoran

Chairman, Glanbia Plc

Mr Mike Doyle

General Manager, Kerry Foods

Ms Dorothy Gallagher

Vice-Chairman,

Consumers’ Association of Ireland

Ms Eilis Gough

Managing Director, Mileeven Fine Foods

Mr Tom Harrington

Public Representative

Ms Paula Mee

Food & Nutrition Consultant

Mr Larry Murrin

Managing Director, Dawn Farm Foods

Mr Joe O’Flynn

Marketing Development Director,

The Irish Dairy Board

Changes during 2005

Term of office expired

25 January 2005:

Mr Michael Dowling (Chairman)*

Appointed Chairman* 21 March 2005:

Mr John Malone

Appointed 15 June 2005:

Mr Mike Doyle,

General Manager, Kerry Foods

Mr Peter O’Connell, ex-Irish Distillers

Term of office expired

2 October 2005:

Fr Nicholas Rashford,

St Joseph’s University, Philadelphia

Resigned 17 October 2005:

Mr Peter O’Connell

Appointed 2 December 2005:

Mr Michael Carey

Re-Appointed 2 December 2005:

Ms Paula Mee

Mr Joe O’Flynn

Term of office expired

3 December 2005:

Mr Paddy Walsh,

Director, Walsh Family Foods

Changes during 2006

Term of office expired 29 June 2006:

Dorothy Gallagher

Appointed 19 June 2006:

Mr Kieran Carolan,

Managing Director, Green Isle Foods

Mr Donogh Lane,

Marketing Director, Irish Distillers

Bord Bia Irish Food Board Annual Report 2005

Meat & Livestock Board

Membership as at 31 December 2005

Chairman*

Vacant

Changes during 2005

Appointed 28 February 2005:

Mr Gerry Maguire

Members

Mr John Bryan

Chairman, National Livestock Committee, IFA

Re-appointed 28 February 2005:

Ms Brid O’Connor

Mr Paul Clarke

National Executive of the Livestock Trade

Term of office expired 12 August 2005:

Mr Sean Buckley,

Associated Craft Butchers of Ireland

Mr Laurence Fallon

Chairman, National Sheep Committee, IFA

Term of office expired 2 October 2005:

Mr Alan Graham

(re-appointed 15 November) Mr Tommy Fitzgibbon

President, Associated Craft Butchers of Ireland

Mr Laurence Fallon

(re-appointed 15 November)

Mr Alan Graham

IFA Poultry Committee

Mr John Horgan

(re-appointed 15 November)

Mr John Horgan

Managing Director, Kepak Group

Mr Pat O’Keeffe

(re-appointed 15 November)

Mr John Madden

Chief Executive, Glanbia Meats

Appointed 15 November 2005:

Mr Tommy Fitzgibbon

Mr Gerry Maguire

Managing Director, Slaney Foods Group

Ms Brid O’Connor

Assistant Director,

Office of the Director of Consumer Affairs

Term of office expired

5 December 2005:

Mr Dan Lenihan (Chairman)*

Mr Michael O’Connor

Sales Manager, Cappoquin Chickens

Changes during 2006

Resigned 31 January 2006:

Mr Laurence Fallon

Mr Pat O’Keeffe

Chairman, National Pigs Committee IFA

Appointed 13 March 2006:

Mr Henry Burns,

Chairman, IFA National Livestock Committee

Mr John O’Leary

Irish Creamery Milk Suppliers’

Association (ICMSA)

Resigned 2 June 2006:

Mr Alan Graham

Appointed 14 June 2006:

Mr Ray Carolan (Chairman)*

Appointed 19 June 2006:

Mr Ned Morrissey,

Chairman, IFA National Poultry Committee

48 49

Quality Assurance Board

Membership as at 31 December 2005

Chairman*

Ms Bríd Rodgers

Former Minister of Agriculture,

Northern Ireland

Members

Dr Joe Buckley

Foodtech Consultants Ltd.

Mr John Cunningham

Ex-Dairygold Food Products

Mr Derek Deane

Irish Farmers’ Association (IFA)

Mr Dermott Jewell

Chief Executive, Consumers’

Association of Ireland

Mr Luke Mulligan

Department of Agriculture & Food

Mr Paul Nolan

Group Development Manager, Dawn Group

Ms Brid O’Connor

Assistant Director,

Office of the Director of Consumer Affairs

Mr Pat O’Rourke

Ex-President,

Irish Creamery Milk Suppliers’

Association (ICMSA)

Mr Aidan Ryan

Mushroom Grower

Mr Brendan Smyth

Chief Adviser, Glanbia

Dr Declan Troy

Head of Centre,

National Food Centre, Teagasc

Changes during 2005

Term of office expired

25 January 2005:

Mr Joseph O’Sullivan (Chairman)*

Appointed Chairman 21 March 2005:

Ms Bríd Rodgers

Resigned 27 April 2005:

Mr Philip Carroll,

Department of Agriculture & Food

Term of Office expired 16 May 2005:

Mr Brendan Smyth

(re-appointed 30 May 2005)

Appointed 30 May 2005:

Mr Luke Mulligan,

Department of Agriculture & Food

(re-appointed 8 July 2005)

Term of Office expired 18 July 2005:

Ms Brid O’Connor

(re-appointed 19 July 2005)

Resigned 26 August 2005:

Mr Eamonn Quinn, Superquinn

Appointed 12 September 2005:

Dr Declan Troy

Changes during 2006

Term of office expired

28 January 2006:

Mr Pat O’Rourke

Bord Bia Irish Food Board Annual Report 2005

Horticulture Board

Membership as at 31 December 2005

Chairman

Mr Kieran Dunne

L & K Dunne Nurseries

Members

Ms Angela Binchy

Landscape Design

Ms Rachel Doyle

Arboretum Garden Centre, Carlow

Ms Olive Harrington

Assistant Parks Superintendent,

Belvedere House, Mullingar

Mr John Hogan

Dublin/Meat Growers

Ms Caroline Keeling

Keeling Fruit Growers/Importers

Mr Gary McCarthy

Chairman, Fruit Growers Association

Ms Grainne Murphy

SAP Nurseries, Co Tipperary

Mr Michael Slattery

Mushroom Grower

Mr Jerry Sweetnam

Fyffes, Tralee

Mr Maurice Whelton

Potato Grower

Ms Celestine Ward

Ballinasloe Garden Centre

Changes during 2005

Term of office expired

25 January 2005:

Mr Denis Lucey, Director, IAWS Group

Appointed Chairman 21 March 2005:

Mr Kieran Dunne

50 51

Organisation Structure

Bord Bia is comprised of the Board, four

Subsidiary Boards, the Chief Executive and the Executive, which provide a range of services required to implement Board policy and programmes.

12 ordinary members, who are appointed by the Board with the consent of the

Minister. The Chairman of each Subsidiary

Board is a member of the Board.

The Board is comprised of a Chairman and 14 ordinary members appointed by the

Minister for Agriculture & Food. There are four Subsidiary Boards (Meat & Livestock,

Consumer Foods, Quality Assurance and

Horticulture) comprised of a Chairman and

The following Board Committees are in place: Audit Committee, Remuneration

& Pensions Committee, Strategy Committee and Board Ryder Cup Committee. The

Executive is comprised of staff based in the Board’s head office and overseas.

Meat & Livestock Board

Chairman:

Ray Carolan

Bord Bia Organisation Structure

Main Board

Chairman:

Angela Kennedy

Horticulture Board

Chairman:

K. Dunne

Quality Board

Chairman:

B. Rodgers

Chief Executive

Aidan Cotter

Consumer Foods Board

Chairman:

J. Malone

Markets

Ireland Europe International

Information Sectors

Meat CFD Horticulture Small Business

Corporate

Bord Bia Irish Food Board Annual Report 2005

Chief Executive

Aidan Cotter

Bord Bia Staff Structure

Chief Operations

Officer

P. Moore

Manager

Information Services

J. Smith

Manager

Consumer Foods

& Ingredients

T. McCarthy

Director

Marketing Services

M. Kennedy

Secretary/Director

S. Kenny

Manager

Meat

G. Brickley

Director

International Markets

O. Brooks

Manager

Home Market

T. Brophy

Manager

International Media

M. Bracken

Director

European Markets

M. Murphy

Manager

Marketing Finance

J. Bracken

Manager Promotions

& Exhibitions

L. Williams

Small Business

M. Kennedy

Russia

A. Barinova

Middle East,

Africa & Asia

Vacant

North America

J. O’Donnell

Amsterdam Office

D. Fennell

Madrid Office

C. Ruiz

Frankfurt Office

Vacant

London Office

B. Blake

Milan Office

J. Keane

Paris Office

J. O’Toole

Financial Controller

G. Bailey

Director

Horticulture

& Quality Assurance

M. Maloney

Manager

Quality Assurance

M. Neary

Changes during 2006

J. Keane appointed Milan Office

M. Neary appointed Manager Quality

D. Fennell appointed Amsterdam Office

52 53

Report of the Comptroller & Auditor General

I have audited the financial statements of An Bord Bia for the year ended 31 December 2005 under the An Bord Bia

Act, 1994.

The financial statements, which have been prepared under the accounting policies set out therein, comprise the Statement of Accounting Policies, the Income and

Expenditure Account, the Statement of Total Recognised

Gains and Losses, the Balance Sheet, the Cash Flow

Statement and the related notes.

Respective Responsibilities of the Board and the Comptroller and Auditor General

An Bord Bia is responsible for preparing the financial statements in accordance with the An Bord Bia Act,

1994 and for ensuring the regularity of transactions.

An Bord Bia prepares the financial statements in accordance with Generally Accepted Accounting Practice in Ireland.

The accounting responsibilities of the Members of the

Board are set out in the Corporate Statement,

Basis of Audit Opinion

In the exercise of my function as Comptroller and Auditor

General, I conducted my audit of the financial statements in accordance with International Standards on Auditing

(UK and Ireland) issued by the Auditing Practices Board and by reference to the special considerations which attach to

State bodies in relation to their management and operation.

An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures and regularity of the financial transctions included in the financial statements.

It also includes an assessment of the significant estimates and judgments made in the preperation of the financial statements, and of whether the accounting policies are appropriate to An Bord Bia’s circumstances, consistently applied and adequately disclosed.

My responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

I report my opinion as to whether the financial statements give a true and fair view, in accordance with Generally

Accepted Accounting Practise in Ireland. I also report whether in my opinion proper books of account have been kept. In addition, I state whether the financial statements are in agreement with the books of account.

I planned and performed my audit so as to obtain all the information and explanations that I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In my opinion, the financial statements give a true and fair view, in accordance with Generally Accepted Accounting

Practice in Ireland, of the state of An Bord Bia’s affairs at 31 December 2005 and of its income and expenditure for the year then ended.

I report any material instance where moneys have not been applied for the purposes intended or where the transactions do not conform to the authorities governing them.

I also report if I have not obtained all the information and explanations necessary for the purposes of my audit.

In my opinion, proper books of account have been kept by An Bord Bia. The financial statements are in agreement with the books of account.

I review whether the Statement on the System of Internal

Financial Control reflects An Bord Bia’s compliance with the Code of Practice for the Governance of State Bodies and report any material instance where it does not do so, or if the statement is misleading or inconsistent with other information of which I am aware from my audit of the financial statements. I am not required to consider whether the Statement on the System of Internal Financial Control covers all financial risks and controls, or to form an opinion on the effectiveness of the risk and control procedures.

John Purcell

Comptroller and Auditor General

11 September 2006

Bord Bia Irish Food Board Annual Report 2005

Statement of Accounting Policies

(a) Basis of Accounting:

These financial statements are prepared under the accruals method of accounting, except as indicated below, and in accordance with generally accepted accounting principles under the historical cost convention.

Financial Reporting Standards recommended by the accountancy bodies are adopted as they become operative. The unit of currency is the Euro.

Leasehold improvements 10%, 6.67%

Furniture & fittings 12.5%

Office equipment

Computer equipment

Motor vehicles

20%

33 1 ⁄

3

%

20%

(e) Marketing Finance:

Expenditure under this heading is accounted for on the basis of actual payments made.

(b) Keeping of Accounts:

Subsidiary Boards:

Under the terms of An Bord Bia Act, 1994, the Board is assisted by four Subsidiary

Boards in respect of Meat and Livestock,

Consumer Foods and Ingredients, Quality

Assurance and Horticulture. All income and expenditure relating to these Subsidiary

Boards is reflected in these financial statements.

Expenditure was incurred on the Targeted

Marketing Consultancy (TMC) Programme in previous years. Under the terms of the programme, a proportion of the expenditure is recoverable over a 24 to 60 month period by way of a royalty based on sales achieved by this expenditure. Income arising under the TMC Programme from amounts reimbursed is accounted for on the basis of cash receipts.

Subsidiary Company:

The Board operates a wholly-owned subsidiary company which does not trade.

Due to the nature of the company, it is not considered appropriate to prepare consolidated financial statements.

(f) Pensions:

There are two Superannuation Schemes in operation within Bord Bia.

(c) Income:

Income shown in the financial statements under Oireachtas Grant-in-Aid represents the actual receipts from this source in the period.

Income from the EU Mushroom, “Food

Dude” and Floriculture Programmes is released to revenue in line with related expenditure and any unexpended balance is included in Creditors.

In respect of the Bord Bia main scheme, superannuation costs are at present funded over the employee’s period of service by way of contributions to a fund managed by trustees. The Department of Finance has given written sanction for the transfer of the Bord Bia Superannuation Schemes, and liabilities relating thereto, from a funded to a “Pay-as-you-Go” basis, for the consequential winding up of the Bord Bia

Superannuation Fund and for the transfer of the assets of this Fund to the State.

(d) Fixed Assets and Depreciation:

Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated to write off the original cost less the estimated residual value of tangible assets on a straight line basis at the following annual rates:

With regard to employees of the former

Bord Glas, a non-contributory defined benefit pension scheme and a contributory spouses and children’s scheme is operated on an administrative basis pending the authorisation of the schemes by the Minister for Finance. Under the provisions of An Bord

Bia (Amendment) Act, 2004, all staff of the

54 55

former Bord Glas were transferred to

Bord Bia with effect from 1 July 2004. The

Act also provided that liability for pension benefits awarded to all former staff of Bord

Glas should be transferred to Bord Bia on terms and conditions no less favourable than those applicable before the transfer.

depreciation and the capital element of future rentals is treated as a liability.

The interest element is charged to the

Income and Expenditure Account over the period of the lease in proportion to the balance of the capital repayments.

Pension costs reflect pension benefits earned by employees in the year. An amount corresponding to the pension charge is recognised as income to the extent that it is recoverable, and offset by Grant-in-Aid received in the year to discharge pension payments.

Rentals in respect of operating leases are charged to the Income and Expenditure

Account as incurred.

(h) Tangible Assets:

Tangible assets are financed out of revenue. Provision is made in the Income and Expenditure Account for a transfer to the Capital Account of amounts allocated for such capital purposes less credits to revenue over the life of the related assets.

Actuarial gains or losses arising on scheme liabilities are reflected in the Statement of Recognised Gains and Losses and a corresponding adjustment is recognised in the amount recoverable from the

Department of Agriculture and Food.

(i) Stocks:

Stocks of stationery are stated at cost.

Pension liabilities represent the present value of future pension payments earned by staff to date. Deferred pension funding represents the corresponding asset to be recovered in future periods from the Department of Agriculture and Food.

In accordance with the requirements of FRS17 - Retirement Benefits, the Income and Expenditure Account, Statement of

Recognised Gains and Losses and Balance

Sheet now recognise pension transactions, movements and balances which were previously shown only as a note to the financial statements. Consequently, the corresponding figures for the previous year have been restated.

(j) Provision for Bad and Doubtful Debts:

Known bad debts are written off and specific provision is made for any amounts the collection of which is considered doubtful.

(k) Foreign Currencies:

Foreign currency balances are translated at the rates ruling at the balance sheet date.

(l) Taxation:

Provision has been made in respect of all VAT liabilities and the PRSI contributions of Irish persons attached to overseas offices.

(g) Leased Assets:

Assets held under leasing arrangements that transfer substantially all the risks and rewards of ownership (finance leases) to Bord Bia are included in the balance sheet as tangible fixed assets at cost less accumulated

(m) Capital Account:

The capital grant element of Oireachtas

Grant-in-Aid received by Bord Bia is credited to the Capital Account as set out in Note 3, and is transferred to the Income and

Expenditure Account over the expected useful lives of the assets to which they relate, in line with asset depreciation.

Bord Bia Irish Food Board Annual Report 2005

Income and Expenditure Account

year ended 31 December 2005

Notes

2005

€ ‘000

Income

Oireachtas Grant-in-Aid

Net deferred funding for pensions

EU Mushroom Programme

EU “Food Dude” Programme

EU Floriculture Programme

Statutory Levy

Project and Other Income

1a

15b

1b

1b

1b

1c

1d

Transfer from Capital Account

Total Income

Expenditure

Marketing and Promotional Expenditure

Marketing Finance

Operating Expenditure

Total Expenditure

Surplus/(Deficit) for Year:

On continuing operations

On operations acquired from Bord Glas

Surplus/(Deficit) for year

Balance at 1 January

Balance acquired from Bord Glas 1 July 2004

Balance at 31 December

2

3

4

5

17,157

300

12,213

29,670

The results for the year relate to continuing operations.

The Statement of Accounting Policies and Notes 1 to 18 form part of these financial statements.

Angela Kennedy

Chairman

Aidan Cotter

Chief Executive

214

214

97

311

20,991

341

120

266

56

5,480

2,407

29,661

223

29,884

2004

€ ‘000

17,067

196

79

5,159

2,500

25,001

220

25,221

14,940

350

11,468

26,758

(266)

(1,271)

(1,537)

237

1,397

97

56 57

Statement of Total Recognised Gains and Losses

year ended 31 December 2005

Notes

Surplus/(Deficit) for Year

Actuarial (Loss)/Gain on Pension Scheme Liabilities 15c

Adjustment to Deferred Pension Funding 15c

Total Recognised Gains and Losses for the Year

2005

€ ‘000

214

(273)

273

214

2004

€ ‘000

(1,537)

2,104

(2,104)

(1,537)

The Statement of Accounting Policies and Notes 1 to 18 form part of these financial statements.

Angela Kennedy

Chairman

Aidan Cotter

Chief Executive

Bord Bia Irish Food Board Annual Report 2005

Balance Sheet

as at 31 December 2005

Notes

2005

€ ‘000

Assets Employed

Fixed Assets

Tangible Assets

Financial Assets

Current Assets

Stocks

Debtors

Cash at bank and in hand

6

7

8

Creditors

(amounts falling due within one year)

Net Current Assets

Total Assets less Current

Liabilities before Pensions

Deferred Pension Funding

Pension Liabilities

Total Assets less Current Liabilities

Financed by

Capital and reserves

Capital account

Income and expenditure account

9

15e

15e

2 1,115

311

1,426

The Statement of Accounting Policies and Notes 1 to 18 form part of these financial statements.

Angela Kennedy

Chairman

Aidan Cotter

Chief Executive

4,093

304

1,426

7,171

(7,171)

1,426

1,115

7

1,122

9

3,168

1,220

4,397

2004

€ ‘000

1,338

97

1,435

1,338

8

1,346

9

2,778

1,828

4,615

4,526

89

1,435

7,103

(7,103)

1,435

58 59

Cash Flow Statement

year ended 31 December 2005

2005

€ ‘000

Reconciliation of Surplus/(Deficit) to Net

Cash Outflow from Operating Activities:

Surplus/(deficit) for year

Net Interest receivable

Depreciation

Capital account transfer

Loss on Disposal of tangible fixed assets

Increase in Debtors

Increase in stocks

Increase in trade creditors

Decrease in taxation and PRSI

(Decrease)/Increase in Accruals & Deferred Income

Net cash outflow from operating activities

Cash Flow Statement

Net cash outflow from operating activities

Returns on investment and servicing of finances:

Bank interest received

Net current outflow of funds

Capital expenditure

Payment to acquire tangible assets

Decrease in Cash

Reconciliation of net cash flow to movement of funds

Decrease in Cash

Net funds at 1 January

Net funds acquired from Bord Glas

Net funds at 31 December

(548)

67

(481)

(128)

(609)

(609)

1,828

1,219

214

(67)

327

(223)

24

(390)

283

(716)

(548)

The Statement of Accounting Policies and Notes 1 to 18 form part of these financial statements.

Angela Kennedy

Chairman

Aidan Cotter

Chief Executive

2004

€ ‘000

(1,537)

(48)

346

(220)

6

(1,236)

(1)

241

(149)

2,359

(239)

(239)

48

(191)

(132)

(323)

(323)

672

1,479

1,828

Bord Bia Irish Food Board Annual Report 2005

Notes forming part of the Financial Statements

year ended 31 December 2005

1.

Income

(a) Included in Oireachtas Grant-in-Aid is € 4,825,000 which has been made available to An Bord Bia under the Marketing Sub-Programme of the Productive Sector

Operational Programme of the National Development Plan 2000-2006.

(b) Amounts included under income from EU-funded programmes arise in respect of contributions by the EU, the Department of Agriculture and Food and industry bodies to the following programmes:

2005

€ ‘000

2004

€ ‘000

EU Mushroom Programme

EU "Food Dude" Programme

EU Floriculture Programme

120

266

56

442

79

79

(c) An Bord Bia Act, 1994, provides for payment to the Board of a levy per head on slaughtered or exported livestock. Under section 37 of the Act, the rates were set at € 1.90 per head for cattle, 25c per head for sheep and 25c per head for pigs.

(d) Project and other income includes industry contributions to joint promotions, trade fairs, information services and seminar and conference fees.

2.

Capital Account

€ ‘000

2005

€ ‘000

1,338 Balance at 1 January 2005

Amount capitalised in respect of purchased tangible assets

Net amount realised on disposal of assets

Amortisation in line with asset depreciation

Net transfer to Income and Expenditure Account

Balance at 31 December 2005

128

(24)

(327)

(223)

1,115

60 61

Notes forming part of the Financial Statements

year ended 31 December 2005

3.

Marketing and Promotional Expenditure

Marketing Development Programmes

Trade Fairs and Exhibitions

Information Services

Quality Assurance

Trade Services

Marketing Services

Communications

Nutritional Advisory Services

4.

Marketing Finance

Marketing Improvement Assistance Programme

Market Participation Programme

Business Support Programme

5.

Operating Expenditure

Board and Sub-Board Members' fees and expenses

Staff costs

Rent, rates and insurance

Telecommunications costs

General business expenses

Audit fee

Depreciation (Note 6)

Loss on disposal of tangible assets

399

7,443

1,484

216

2,298

22

327

24

12,213

164

134

2

300

2005

€ ‘000

7,116

1,211

2,060

1,242

4,163

719

261

385

17,157

340

6,596

1,459

274

2,235

17

345

6

11,272

2004

€ ‘000

6,123

1,367

1,718

799

3,558

609

314

452

14,940

196

154

350

Bord Bia Irish Food Board Annual Report 2005

Notes forming part of the Financial Statements

year ended 31 December 2005

5.

Operating Expenditure (continued)

Cost

At 1 January 2005

Additions in year

Adjustments

Disposals

1,870

3

At 31 December 2005 1,873

Depreciation

At 1 January 2005

Charged in year

Adjustments

Disposals

980

179

(3)

At 31 December 2005 1,156

Net Book Amounts

At 31 December 2005

At 31 December 2004

717

890

678

46

(2)

(7)

715

911

29

(12)

(11)

917

202

233

530

45

150

(25)

700

610

40

159

(26)

783

83

80

2005

€ ‘000

732

38

(147)

(3)

620

834

3

(147)

(3)

687

67

102

2004

€ ‘000

Operating expenditure includes the full cost of staff and office expenses in head office departments and in the overseas offices. Staff costs are comprised of:

Wages and salaries

Social welfare costs

Pension costs (Note 15c)

6,002

438

1,003

7,443

5,562

434

600

6,596

The total number of employees (including part-time persons) at 31 December 2005 was 88 (2004:89).

The cost of certain part-time employees is included in Marketing and Promotional

Expenditure.

During the year, professional advice was received to the effect that payroll procedures in two overseas offices of Bord Bia were not in full compliance with local requirements.

Bord Bia initiated contact with, and made full disclosure to, the relevant authorities in the jurisdictions concerned. Full provision has been made in these financial statements for all historical amounts due under this heading.

6.

Tangible Fixed Assets

Leasehold

Property & improvements

Furniture and

Fittings

Computer

Equipment

Office

Equipment

Motor

Vehicles Total

€ ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000

96

53

(49)

100

4,321

128

0

(89)

4,360

63

19

(28)

54

2,983

327

1

(66)

3,245

46

33

1,115

1,338

62 63

Notes forming part of the Financial Statements

year ended 31 December 2005

7.

Financial Fixed Assets

The Irish Food Board (An Bord Bia) France SARL is wholly-owned by An Bord Bia.

The company does not trade.

It rents property on behalf of Bord Bia and these costs are fully reflected in these financial statements.

8.

Debtors

2005

€ ‘000

2004

€ ‘000

Amounts falling due within one year:

Debtors

Less: Provision for Bad Debts

Prepayments and accrued income

2,079

(505)

1,574

1,594

3,168

1,575

(485)

1,090

1,688

2,778

9.

Creditors

(amounts falling due within one year)

Trade creditors

Taxation and social welfare (Note 10)

Accruals and deferred income

565

3,528

4,093

283

4,243

4,526

Bord Bia Irish Food Board Annual Report 2005

Notes forming part of the Financial Statements

year ended 31 December 2005

10. Taxation and Social Welfare

2005

€ ‘000

2004

€ ‘000

Taxation and social welfare creditors comprise the following:

Income Tax

P.R.S.I.

An Bord Bia is not liable to corporate taxes in Ireland or in the countries in which it operates because it is a non-commercial State-sponsored body.

It is liable to employer taxes in Ireland and complies with related withholding, reporting and payment obligations. In some other countries in which it operates, an exemption from local taxation has been availed of under the governmental services article of the double taxation agreement. This position is currently under review by Bord Bia which is actively seeking clarification to determine whether overseas employment taxes arise in any of the jurisdictions where this exemption has been availed of. The review may result in a liability to taxes in some jurisdictions, but given that this decision rests with the various jurisdictions in question, there are uncertainties in relation to the amount and timing of any liabilities, if any. At the balance sheet date it was not possible to make a reliable estimate of these possible contingent liabilities and, consequently, no provision has been made in the financial statements for the year ended 31 December 2005.

11. Provisions for Liabilities and Charges

At 1 January

2005

€ ‘000

Provided/

(Released) during year

€ ‘000

At 31 December

2005

€ ‘000

Value Added Tax

Provision for Dilapidations

These provisions are included within Creditors.

500

350

623 1,123

350

64 65

Notes forming part of the Financial Statements

year ended 31 December 2005

12. Commitments

(a) Capital Commitments

An Bord Bia had no capital commitments at the year end.

(b) Financial Incentives

There were no commitments in respect of Marketing Finance Programmes at the year end.

(c) Operating Leases

Operating leases comprise leases on premises. Leasing commitments payable during the next twelve months amount to € 913,453 made up as follows:

€ ‘000

Payable on leases on which the commitment expires:

Within one year

Within two to five years

Six years and over

102

658

153

913

13. Contingent liabilities

(a) Contingent liabilities exist in respect of amounts approved but unclaimed at the year end under the terms of the following Marketing Finance Programmes operated by An Bord

Bia as follows:

2005

€ ‘000

2004

€ ‘000

Marketing Improvement Assistance Programme

Market Participation Programme

Business Support Programme

718

546

60

1,324

604

519

1,123

(b) Litigation is in process against the organisation arising from a dispute in which it is alleged that the former CBF infringed employment rights and in which the plaintiff is seeking € 190,461. The Board are of the opinion that the claim can be successfully resisted. The information usually required by FRS12 is not disclosed on the grounds that it can be expected to prejudice seriously the outcome of the litigation.

(c) In 2004, the European Court of Auditors queried the eligibility of part of Ireland's claim under the 1994-1999 EU Structural Funds Programme, which was operated by Bord Bia. The amount at issue is € 630,000. This amount, which constituted less than 2% of Bord Bia EU programme activities during the period from 1994 to 1999, is currently the subject of discussion between the EU Commission and the Department of Agriculture & Food. It is not possible at this stage to quantify the financial implications, if any, for Bord Bia.

Bord Bia Irish Food Board Annual Report 2005

Notes forming part of the Financial Statements

year ended 31 December 2005

14. Recoverable Incentives

Under the terms of the Targeted Marketing Consultancy (TMC) Programme, a total of € 2,911 was due to be recovered in 2006 and subsequent years from participating companies:

2005

€ ‘000

2004

€ ‘000

Estimated amount recoverable at end of year 3 3

Recoverable incentives are accounted for on a cash receipts basis and accordingly are not included in debtors.

15. Superannuation

a) Superannuation Schemes

The Board operates two defined benefit superannuation schemes for certain eligible employees.

1) the Bord Bia main scheme, for which the approval of the Minister for Agriculture and Food and the Minister for Finance has been received. The contributions of employees and Bord Bia are at present paid into a fund managed by the trustees.

It is intended that this scheme will be amended to a "Pay-as-you-Go" basis in the near future.

2) the former Bord Glas scheme. This consists of a non-contributory defined benefit pension scheme and a contributory spouses and children’s scheme is operated on an administrative basis pending the authorisation of the schemes by the Minister for Finance.

An actuarial valuation of the Bord Bia Superannuation Schemes was carried out as at 31 December 2005 for the purpose of preparing this FRS17 disclosure.

The Fund assets are stated at their mid-market value at each balance sheet date.

The financial assumptions used to calculate the retirement benefit liabilities under

FRS 17 were as follows:

Valuation Method

31/12/2005 31/12/2004

Projected Unit Projected Unit

Discount Rate

Inflation Rate

Salary increases

Pension increases

Return on assets

4.25%

2.25%

4.50%

4.00%

6.26%

4.75%

2.25%

4.50%

4.00%

6.20%

66 67

Notes forming part of the Financial Statements

year ended 31 December 2005

The market value of the assets of the Fund and the expected rates of return were:

Long-term rate of return expected at

31-Dec-2005

Value at

31-Dec-2005

€ ’000

Long-term rate of return expected at

31-Dec-2004

Value at

31-Dec-2004

€ ’000

Equities

Bonds

Property

Cash

Total market value of

7.00%

4.00%

6.00%

2.25% superannuation fund assets

Present value of pension liabilities

Net deficit in superannuation schemes

10,920

2,361

702

633

14,616

(21,787)

(7,171) b) Net Deferred Funding for Pensions in Year

7.00%

4.00%

6.00%

2.25%

8,419

1,636

549

774

11,378

(18,481)

(7,103)

2005

€ ‘000

2004

€ ‘000

Funding recoverable in respect of current year pension costs

Oireachtas Grant-in-Aid applied to pay pension contributions and pension benefits

Analysis of Interest on Pension Scheme Liabilities

Interest on scheme liabilities

Expected return on scheme assets

1,003

(662)

341 c) Analysis of total pension costs charged to Expenditure

Current service cost

Interest on Pension Scheme liabilities (see below)

833

170

1,003

902

(732)

170

797

(600)

197

715

82

797

777

(695)

82

Analysis of amount recognised in Statement of Total Recognised Gains and Losses

Experience gains and (losses) (2,020)

Changes in assumptions 1,747

(537)

2,641

(273) 2,104

Bord Bia Irish Food Board Annual Report 2005

Notes forming part of the Financial Statements

year ended 31 December 2005 d) Deferred Funding Asset for Pensions

An Bord Bia recognises these amounts as an asset corresponding to the unfunded deferred liability for pensions on the basis of the set of assumptions described above and a number of past events. These events include the statutory basis for the establishment of the superannuation schemes, and the policy and practice currently in place in relation to funding public service pensions, including contributions by employees and the annual estimates process. An Bord Bia has no evidence that this funding policy will not continue to meet such sums in accordance with current practice.

The Department of Finance has given written sanction for the transfer of the

Bord Bia Superannuation Schemes, and liabilities relating thereto, from a funded to a “Pay-as-you-Go” basis, for the consequential winding up of the Bord Bia

Superannuation Fund and for the transfer of the assets of this Fund to the State.

The deferred funding asset for pensions as at 31 December 2005 was € 7,170,600

(2004: € 7,102,700).

e) Movement in Net Pension Liability during the financial year

2005

€ ‘000 €

2004

‘000

Net Pension Liability at 1 January

Net Pension Liability of Bord Glas at 1 July 2004

Current Service Cost

Interest Costs

Actuarial (gain)/loss

Pension contributions and benefits paid in the year

Net Pension Liability at 31 December

7,103

833

170

(273)

(662)

7,171

3,744

1,058

715

82

2,104

(600)

7,103

68 69

Notes forming part of the Financial Statements

year ended 31 December 2005 f) History of experience gains and losses

2005 2004

(Gain)/loss on scheme assets

Amount € ‘000 (1,642)

% of scheme assets at end of period (11.24%)

(402)

(3.54%)

(Gain)/loss on scheme liabilities

Amount € ‘000 (378)

% of scheme liabilities at end of period (1.74%)

(135)

(0.73%)

2003

(632)

(6.67%)

2002

2,157

28.06%

(717)

(5.42%)

1,464

11.66%

Total actuarial (gain)/loss recognised in STRGL

Amount € ‘000 (273)

% of scheme liabilities at end of period (1.26%)

2,104

11.39%

(1,349)

(10.19%)

4,749

37.80%

16. Board Members - Disclosure of Transactions

In the normal course of business the Board may approve grants and may also enter into other contractual arrangements with undertakings in which Bord Bia Board

Members are employed or otherwise interested. The Board adopted procedures in accordance with the guidelines issued by the Department of Finance in relation to the disclosure of interests by Board Members and these procedures have been adhered to by the Board during the year.

No grants were approved or paid during the year to companies with which Board

Members are associated.

17. Comparative figures

Certain amounts have been re-grouped in these financial statements and the comparative figures have been restated to ensure consistency with the new presentation.

18. Approval of Financial Statements

The financial statements were approved by the Board on 14 June 2006.

Bord Bia Irish Food Board Annual Report 2005

Marketing Finance Grant Payments 2005

Company Name

Aines Chocolates Ltd

Ardrahan Dairy Products Ltd

Ballybrado Ltd

Bia Kid Ltd

Boozeberries Ltd

Brids Brown Bread

Bunratty Mead & Liqueur Ltd

Cameo Products Ltd

Carlow Craft Brewery Ltd

Carrigaline Farmhouse Cheese

Carrigbyrne Farmhouse Cheese Ltd

Castlehill Catering

Celtic Chocolates Ltd

Tara's Handmade Quality Foods Ltd

Cibo Food Company Ltd

Clonakilty Food Co Ltd

Cocoa Bean Handmade Chocolates

Country Cooking Company Ltd

Couverture Ltd

Creative Sauces Ltd

Crozier Dairy Products Ltd

Cybercolors Ltd

Dave and Teri's Cookies

Decs Foods Ltd

Deep Blue Sky Ltd t/a Hildegard Health Ltd

Dingle Peninsula Cheese

Druid Chocolates Ltd

Prog

MIAP

MIAP

MPP

MPP

MPP

MIAP

MPP

MPP

MPP

MIAP

MPP

MPP

MPP

MIAP

MIAP

MPP

MIAP

MIAP

MPP

MPP

MPP

MPP

MPP

MPP*

MIAP

MPP

MIAP

Paid €

1,289

3,500

3,402

3,000

2,956

7,000

8,000

1,520

2,000

1,600

4,990

10,000

984

2,615

5,162

3,000

3,086

1,941

1,170

2,150

10,298

9,018

7,667

1,960

500

3,500

3,000

70 71

Company Name

Durrus Farmhouse Cheese

Emerald Cheese Co Ltd

Flair Confectionery

Flamewood Ltd t/a McCaughey Foods

Follain Teoranta

Garryvoe Foods Ltd

George Mogerley Ltd

Glenilen Farm

Green Pastures (Donegal) Ltd

Gubbeen Farmhouse Products Ltd

Healy Fine Foods Ltd

Hyde Ltd

Ina's Kitchen Desserts Ltd

Itsa Bagel Ltd

J&L Grubb Ltd

John O'Sullivan Ltd

Kilfera Food Manufacturers Ltd

Knockanore Farmhouse Cheese Co Ltd

Krawczyks West Cork Salami

Laurence Whelan (Potatoes)

M&S Browne Ltd

Mileeven Ltd

Milleens Cheese Ltd

Monsport Ltd

Mount Callan Farmhouse Cheese

Murphys Ice Cream Ltd

My Own Food Products Ltd

Paid €

3,983

6,581

3,381

3,200

1,720

6,000

1,487

7,000

464

1,922

5,888

3,000

3,353

9,000

12,000

3,505

750

12,659

4,000

7,000

6,500

5,000

1,308

5,000

983

2,985

6,000

Prog

MPP

MIAP

MIAP

MIAP

MIAP

MIAP

MIAP

MIAP

MIAP

MPP

MPP

MPP

MPP

MIAP

MPP

MIAP

MIAP

MPP

MPP

MIAP

MIAP

MIAP

MIAP

MIAP

MIAP

MPP

MIAP

Bord Bia Irish Food Board Annual Report 2005

Company Name Prog

Natural Green Ltd

Olvi Oils Ltd

Paganini Ice Cream Ltd

Perfect Gifts of Ireland Ltd t/a Wildes Irish Handmade Chocolates

Sams Cookies Ltd

Stable Diet Ltd

Straight Sausages Ltd

Stuart & McLean Ltd t/a Laragh Stuart

Sunnyside Fruit Farm Ltd

Sunshine Juice

Swift Fine Foods Ltd

The Butlers Pantry

The Cocoa Tree Handmade Chocolates

The Irish Cone and Wafer Mfg Company Ltd

Tipperary Organic Ice Cream Ltd

Twine Inc & Organic Herb Company

Wild Orchard Natural Beverages

Zed Candy Ltd

Kelly's Nursery Ltd

Total

MPP

MPP

MPP

MPP

MIAP

MIAP

MIAP

MIAP

MPP

MPP

MIAP

MIAP

MIAP

MPP

MPP

MPP

MIAP

MPP

BSP***

*MPP - Marketing Participation Programme

**MIAP - Marketing Improvement Assistance Programme

***BSP - Business Support Programme

Paid €

1,731

8,000

3,000

11,381

1,058

5,000

6,000

4,000

6,000

4,000

1,644

306,720

4,625

3,488

357

6,015

2,775

1,908

5,000

764

72 73

In accordance with the Official Languages Act 2003 this publication is available in Irish.

IRELAND – HEAD OFFICE

Clanwilliam Court,

Lower Mount Street,

Dublin 2, Ireland.

Tel: +353 1 668 5155 Fax: +353 1 668 7521

Email: info@bordbia.ie Web: www.bordbia.ie

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Email: info@bordbia.ie Web: www.foodisland.com

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28046 Madrid, Spain.

Tel: +34 91 435 6572 Fax: +34 91 435 6211

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Tel: +39 02 72 00 20 65 Fax: +39 02 72 00 40 62

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Moscow 107139, Russia.

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Maison d’Irlande,

33, rue de Miromesnil,

75008 Paris, France.

Tel: +33 1 42 66 22 93 Fax: +33 1 42 66 22 88

Email: info@bordbia.ie Web: www.foodisland.com

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Suite 728, Shanghai Centre,

No. 1376 Nan Jing Xi Road,

Shanghai, 200040 China.

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