Annual Report and Accounts 2004
2
Annual Report and Accounts 2004
Contents of Report
01
Export Figures
03
Chairman’s Statement
08
Chief Executive’s Review
48
Corporate Statement
52
Board Membership
58
Organisation Structure
62
Report of the Comptroller & Auditor General
64
Statement of Accounting Policies
67
Income and Expenditure Account
68
Balance Sheet
69
Cashflow Statement
70
Notes Forming part of the Financial Statements
81
Marketing Finance Grant Payments 2004
DESIGN AND PRODUCED BY ZEUS CREATIVE, DUBLIN
Presentation to the Minister for Agriculture and Food
Bord Bia Annual Report2.indd 3
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 2004.
Angela Kennedy
Chairman
In accordance with the Official Languages Act 2003 this publication is available in Irish
10/08/2005 09:55:56
Exports of Irish Food & Drink (€m)
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4
01
Report
and Accounts 2004
Annual Report andAnnual
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2004
Exports of Irish Food & Drink by Sector (€m)
2003
2004 (p)
% Change
2004/2003
€m
€m
%
Dairy products & Ingredients *
1,755
1,860
+6
Prepared Foods
1,518
1,521
-
Beef *
1,300
1,400
+8
Beverages
1,077
1,016
-6
Fish
380
370
-3
Pigmeat
250
265
+6
Poultry
253
249
-2
Sheepmeat
145
165
+14
Edible Horticulture & Cereals
197
179
-9
Live Animals
147
116
-21
7,022
7,141
+1.7
16
16
-
Total Food & Drink
Amenity Horticulture
* Including Refunds
5
02
Chairman’s Statement
The value of Irish food, drink and
horticulture exports in 2004 exceeded
€7.1bn, representing an increase of 1.7%
on 2003. This was a good performance
in the context of a weakening Dollar
and Sterling, retail food price deflation
in our largest market, and a continuing
highly competitive trading environment.
Conditions are set to remain challenging
in 2005 but the industry is well
positioned to maintain its current growth.
03
6
Ireland’s Food, Drink and Horticulture
industry represents the largest area
of indigenous economic activity and
accounts for over 55% of exports from
indigenous companies. Output from
this sector contributes 9% of Gross
Domestic Product (GDP) and provides
158,100 direct jobs or 9% of total direct
employment. It is an industry comprised
of companies ranging from the very
small to the very large; from start-up
companies to established players; all of
whom make a valuable contribution to
national economic prosperity, regional
distribution of income, and sustainable
development. Furthermore, as an
indigenous sector with low-income
outflow and profit repatriation it makes
a correspondingly larger contribution
to Irish GDP and wealth creation.
Behind the statistics are the people who make
things happen and who know that the sine qua
non of success is their commitment to excellence
and a spirit of renewal and change. They know
that these values are at the centre of all successful
enterprises and that ultimately they are the
dynamics of our prosperity and achievement.
They recognise that change is not only challenge
but also opportunity; that the next plateau is a
stepping-stone to the one after and if they don’t
occupy it, somebody else will. Above all they are
aware that they operate in a highly competitive
environment where change, innovation and
new technology are the order of the day.
The landscape in which this vital industry operates
is changing rapidly and it is probably true to say
that there are more major developments than ever
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product labeling and environmental regulations
have to be factored into efficient consumer and
market-focused production processes. Costeffective application of new and leading-edge
technologies will be key to success and the
overall ethos will increasingly be of a knowledgebased industry. To retain efficiency, enterprises
must win the constant battle to control costs,
whatever economic environment presents itself,
and sufficient personnel with the right skills
must be available. Further appreciation of the
Euro against the US Dollar or Sterling, or any
significant increases in energy prices or in other
inputs, are risks and could place significant
competitive pressure on the enterprise.
before. Success will be contingent on our collective
ability to respond to these challenges and to take
advantage of the opportunities they bring.
The decoupling of payments from production from
1 January 2005 is the most significant Common
Agricultural Policy reform to date. EU enlargement
from 1 May 2004 during Ireland’s EU Presidency,
is a most ambitious step and will increase
competition and open up new opportunities. The
onward march of the World Trade Organisation,
resulting in greater market liberalisation, will mean
more competition at world price levels. Retail
consolidation and concentration will continue,
further driving centralisation of buying and
distribution, rationalisation of supply base, strategic
outsourcing and increasing pressure on margins.
Food safety, product traceability, quality assurance,
Interest in health and wellbeing is the dominant
trend affecting consumer choice and is playing a
major role in driving growth in food markets. Food
and drink companies have to respond with credible
solutions. Success will require a deep understanding
of consumer needs and behaviour and significant
investment in developing science-enhanced
products that deliver demonstrable and ratified
health benefits. Convenience is also a major driver
of change. Recent data suggests that in ten years
time snacking and informal meals could account for
70% of all eating occasions. More recently, we have
seen an additional consumer trend, a ‘shift to value’,
that cuts across all ages, nearly all income groups
and, to some degree, all consumer segments.
This highlights the need for focusing on quality
and nurturing strong and differentiated brand
positions in a highly competitive market, while
also recognising the major part that can be played
by our increasingly successful Small Business
and Speciality Food sector, which has a potential
market worth almost €6.1bn between Ireland
and the UK. These trends will continue to shape
04
7
both consumer demand and manufacturer and
retailer response. In order to succeed, continuous
innovation will be essential in maintaining
consumer interest and gaining retailer acceptance.
This environment in which the Irish food, drink
and horticulture industry operates is hugely
competitive. The scale and scope of change
already referred to clearly indicate that it is facing
a defining period. It is no less so for Bord Bia,
which recognises the need to adapt its strategies
and priorities so that it can continue to deliver
significant value to its stakeholders. Towards the
end of 2004, the Board initiated a comprehensive
strategy review and consultation process, the
outcome from which is the strategic repositioning
of the organisation in preparation for the next
stage of development. Bord Bia knows it cannot
stand still, that change is the only constant.
Like the industry we serve, we will continue
to strive to achieve new levels of excellence
that will ensure we stay ahead of the curve.
05
8
2004 saw the expansion of Bord Bia following
the integration of Bord Glas (the Horticultural
Development Board). This has gone well and
positions us to deliver the efficiencies and
economies that were envisaged, while ensuring
Horticulture benefits from being part of a larger
organisation. I would like to thank everybody
who contributed to this success, in particular
Dan Lenihan, former Chairman of Bord Glas.
A new subsidiary board for Horticulture was
established, which, I am pleased to say, is making
an important contribution. Decentralisation has
also been placed on the agenda and, while no
decision has been made regarding timing, we
are working closely with our parent Department
regarding this Government decision.
During the year, Aidan Cotter became the new
Chief Executive. He has done a superb job ensuring
continuity and preparing Bord Bia for the next
stage of development. He has also helped me
greatly and this has been particularly important
during these early days since my appointment.
Aidan’s predecessor, Michael Duffy, was the
first Chief Executive. He had the responsibility
of getting the new organisation off the ground
and implementing Bord Bia’s new remit. He did
an excellent job, and I thank him also for his
contribution to the development of Bord Bia.
My predecessor, Philip Lynch, who served for three
terms as Chairman of Bord Bia (having previously
been Chairman of CBF – the Irish Livestock & Meat
Board), did a magnificent job in the development
of Bord Bia, bringing it to the stage where it
has built a considerable reputation and is now
a major resource for the Irish food, drink and
horticulture industry. He has earned our gratitude
and appreciation and I am delighted to celebrate
his many achievements in Bord Bia, and in the
national and international business arenas.
I would like to congratulate Mary Coughlan, T.D.,
on her appointment as Minister for Agriculture
& Food. I thank her for appointing me to the
Chair of Bord Bia and for the confidence she has
reposed in me. The Minister has articulated a
clear vision which challenges us to continue the
work of securing a diverse, competitive, exportorientated and consumer-led industry that
delivers maximum benefit to all stakeholders
and contributes to the prosperity and wellbeing
of our country. We will assist the Minister in
every way possible to meet this challenge.
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2004
stakeholder organisations, with whom we work
closely, and who contribute greatly to our work.
I thank my Board colleagues for their dedication
and commitment, and for their support, which
has been particularly important in the early days
while I was getting my feet under the table, so
to speak. I appreciate this very much. I thank
the Chairmen of the Subsidiary Boards (Meat &
Livestock, Consumer Foods, Quality Assurance and
Horticulture) for their extra time and commitment,
and the Members, who are a further pool of
talent and expertise, and who carry out their
sectoral remits with great dedication and skill.
Bord Bia Chairman Angela Kennedy with outgoing Chairman
Philip Lynch.
There are many organisations and people that
assist us and contribute to our success. We
are most appreciative indeed of the support
and encouragement we receive from Minister
Coughlan and Ministers of State, John Browne
and Brendan Smith (with special responsibility
for food and horticulture); from Secretary General
Tom Moran and the officials of the Department of
Agriculture & Food; and former Secretary General,
John Malone, whom we are now fortunate to
have on the Board of Bord Bia. Without them
we could not succeed. I thank our Ambassadors
and Irish Embassy staff, with whom we have a
close and fruitful working relationship also, and
who support us and add considerable value to
our activities. I extend appreciation to all our
Corporate governance compliance requirements
have expanded considerably, bringing with them
an increased workload. Bord Bia is committed
to maintaining the highest standards of
corporate governance in accordance with the
Code of Practice for the Governance of State
Bodies. I thank the Chairman of the Board
Audit Committee and Members of the Board
Committees (Audit, Strategy, and Remuneration
& Pensions) for their important contributions
and for taking on substantial extra workloads.
In conclusion, I extend my compliments and
appreciation to our Chief Executive, management
and staff, whose professionalism and dedication
I have come to admire in the short time since my
appointment in February. It is on them that the
Board relies to deliver the strategic objectives.
Our trust is in good hands. We have finished
one decade since the establishment of Bord Bia.
We look forward with confidence to the next.
Angela Kennedy
Chairman
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Report
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Chief Executive's Review
The robust, overall export
performance of the industry last
year, with exports surpassing €7
billion, was marked by a number of
particularly encouraging features.
Firstly, the prepared foods sector,
with significant growth potential,
continued its upward path despite
a very competitive environment and
food price deflation in our largest
market. Secondly, a significant
achievement was recorded by the
beef industry when it exported 90%
of its volumes to Europe’s higher
value markets for the first time
since the late 1970s. And thirdly,
small, speciality food businesses are
performing strongly, enjoying double
digit growth, even though they are by
definition starting from a small base.
Together, the three largest sectors of the
industry, meat, dairy and prepared foods,
generated a combined growth in value
amounting to over €200 million. The net
increase however fell back to €120 million
for the year when account is taken of lower
values in other sectors, principally in beverages.
The latter was largely due to exceptional,
structural issues involving the relocation of
some production within the island of Ireland.
Almost 70% of the industry’s exports were to
destinations outside the Eurozone in 2004.
As a result, the movement of sterling and the
dollar underlined the continued significance
of currency movements to the industry. The
dollar, in particular, depreciated by ten percent
on average across the year compared with
2003, reducing competitiveness and the euro
value of sales to international markets.
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 2004 are set out below.
Highlights
• The Second European Meat Forum took
place in Dublin in May with the theme,
"A World of Opportunities". It covered topics
on consumer trends, advances in packaging
as well as developments in the retail and food
service sector. It was attended by 350 invited
guests from 17 countries, including 165 buyers
from the major European retail, foodservice
and manufacturing sectors, 25 overseas
journalists and over 100 Irish meat company
representatives and industry organisations.
• Bord Bia’s Events Services Department
organised 78 events in 2004, including the
European Meat Forum and Marketplace
along with first time participation at shows
in China-SIAL China, International Meat
08
11
Industry Show, Beijing and China Agricultural
Show. The department also organised a food
tasting and food display on the occasion
of the meeting of the EU Ministers for
Agriculture on Garinish Island in May.
• The aim of the 2004 Bord Bia Fresh Produce
Retail Awards was to reward excellence in
retail standards for fresh produce, thereby
promoting increased sales. Recognition was
given to stores where the product range,
availability and merchandising of local produce,
food safety, quality and point of sale material
were of the highest possible standards.
• Bord Bia launched its promotion of mushrooms
in association with the Irish Mushroom
Growers’ Association (IMGA). The campaign
highlighted the benefits of eating more
mushrooms, particularly to younger consumers,
in terms of the taste, ease of preparation,
versatility and nutritional value of mushrooms.
A national billboard advertising campaign
featuring a mushroom recipe appeared in key
cities and towns and on roads nationwide.
09
• The growing market demand for plants was
highlighted at Bord Bia’s first conference for the
gardening industry. Aimed at promoting greater
partnership within the gardening industry,
the event consisted of a conference and a
series of industry tours. International industry
experts from landscape design, business
development, retail and research backgrounds
provided insights into business clustering, new
product development, consumer trends and
the interaction between people and plants.
• In Italy a co-branding proposal, combining
the Irish beef mark and retailing brands
customised by markets, was developed
and presented to retail customers. The
initiative is being implemented and
promoted so far by three retailers with
further retailers set to come on stream.
• The Chef’s Irish Beef Club was launched in
the Netherlands, Britain and France with the
aim of building new market positions in the
upper end of the foodservice market and
enhancing the brand image of Irish beef. Fifteen
top chefs from France, the Netherlands and
Britain visited supplying plants in order to
build their knowledge of Irish beef produced
under the Quality Assurance Schemes.
• Bord Bia completed the revision of the
Beef Quality Assurance Scheme (BQAS).
The new standard was approved by the
Irish National Accreditation Board (INAB)
as being suitable for EN 45011 certification.
Bord Bia reached agreement with the beef
industry on arrangements to implement the
BQAS. By year end all necessary measures
were in place to enable the scheme to
commence from January 2005.
• As part of the process to gain market access
for Irish meat products in China, Bord Bia
exhibited at two important trade fairs in
Beijing as well as SIAL China in Shanghai. A
senior Chinese delegation from the General
Administration of Quality Supervision,
Inspection and Quarantine (AQSIQ) visited
Ireland. The delegation met with Minister
Annual Report and Accounts 2004
Walsh and senior officials of the Department
of Agriculture and Food (DAF) and were given
formal presentations by both DAF and Bord Bia.
• Meat and livestock represented the single
largest category of exports in 2004, amounting
to an estimated €2.2 billion and an aggregate
growth rate of almost 5% over 2003 levels.
An improved price performance in beef and
pigmeat exports and increased sheepmeat
volumes, more than offset reductions in the
value of poultry and live animal exports.
At the launch of the mushroom promotion were Michael
Maloney, Director of Horticulture, Bord Bia (left) and
Michael Slattery, Chairman, Irish Mushroom Growers’
Association with model Katie French.
• A UK Retail Intelligence Package was designed
to assist Irish companies address information
requirements in the marketplace. It consisted
of a UK media report sent daily by e-mail four
to six updates per year on retailer performance,
two directories profiling both the larger
supermarket chains and the convenience and
smaller chains, along with seminars/workshops.
• Applications for funding for the Bord Bia grants
programmes for Small Business were received
from over 100 companies. These companies
were paid grants to the value of €350,000.
The grant-funded companies were primarily
in the confectionery, chilled dairy products,
food ingredients and prepared meals sectors.
• A major marketing and promotional programme
was launched to increase the awareness of
Féile Bia among consumers highlighting the
“Certified Farm to Fork” message. The campaign
included the launch of a plaque for members.
Consumer research during the year noted a
strong increase in the awareness of Féile Bia.
10
Membership continued to grow during 2004,
reaching 1350 member establishments.
• Bord Bia and Irish Egg Marketing successfully
applied to the EU for financial support worth
€150,000 for an Egg Information Campaign to
promote awareness of the newly introduced
EU egg marking programme. The financial
contribution is made up of 50% from EU,
30% from Irish Egg Marketing and 20% from
Department of Agriculture and Food.
• Bord Bia launched its healthy eating campaign
for meat and vegetables entitled "Low Fat No
Fuss". The promotion highlighted the benefits
of combining lean red meat and vegetables
as a low fat, convenient and nutritious meal
solution. The healthy eating campaign included
a national radio promotion, TV cookery
demonstrations and quick and easy recipe ideas
for preparing meat and vegetable dishes.
• Bord Bia’s public web site (www.bordbia.ie)
had over 125,000 ‘unique visitors’ during 2004.
The site was substantially revamped in order
to incorporate the content from the award
winning Bord Glas site subsequent to the
amalgamation and to reflect an analysis of a
visitor questionnaire completed on the Bord Bia
site earlier in the year.
11
• The registered user base for the two Bord Bia
extranets – the Client Portal and the Producer
Portal - passed the 500 individuals mark
during 2004. The Client Portal was revamped
in response to independent research amongst
users and usage has increased due to the
TASTE Council. At the launch of the TASTE Council were council
members Kevin Thornton, Thornton’s Restaurant, Dublin and
Darina Allen, Ballymaloe Cookery School.
Annual Report and Accounts 2004
introduction of a number of new “eAlerts”.
These eAlerts enable Bord Bia to bring relevant
news to users who have chosen to subscribe
to the individual themes. For example, one
of these eAlerts combines information on
new products, packaging, flavours and retail
trends in order to provide “inspiration” for
new product ideas or other innovations.
• Bord Bia held the fourth in a series of seminars
in June as part of its Health & Wellbeing
programme. The seminar included expert
speakers in the field of health and nutrition
and EU legislation. Papers highlighted the
health concerns in adults and children and
explored the European diet and what can be
done to improve the food we choose to eat.
• Bord Bia continued to develop farmers’
markets as an alternative marketing channel
for the speciality sector and worked with
a number of local communities around
the country assisting them in establishing
farmers’ markets in their areas. The Food at
Farmleigh events was extended to include
an Artisan Bread Award which was run in
conjunction with DIT’s National Bakery School.
• Bord Bia has agreed to sponsor the world’s
first University of Gastronomic Sciences
established in Italy by the Slow Food movement.
The new University curriculum will include
a programme on science, nutrition, history,
culture and gastronomy of Irish food.
• Bord Bia participated at the major Slow Food
exhibition in Turin, Italy. This event is staged every
two years and is a market exhibition of prime
quality food and drink as well as a school of taste,
presenting delicacies from all over the world.
• The TASTE Council established by Bord Bia,
an industry-led group representing the
full artisan and speciality food chain from
production through to marketing, distribution
and retailing, works strategically in support of
the artisan and speciality producing sector to
maximise its contribution to the Irish agri-food
economy, society, culture and environment.
The Taste Council made a number of key
submissions and presentations to Government
and Statutory bodies on the sector.
• Bord Bia deepened its relationship with
retail and foodservice buyers during the year
with a programme of supplier buyer events,
inward buyer visits and the production of
a comprehensive all-Ireland speciality food
directory profiling over 200 small food producers.
• In September 2004, Bord Bia hosted 225
International buyers at Marketplace Ireland.
Fifty four companies from the food and drinks
industry exhibited their products over two
days and 1,330 scheduled one to one meetings
were held with buyers. The estimated new
sales after six months were in excess of €9m.
• Bord Bia built on its two year agreement with
Bank of Ireland Business Banking to partner the
Brand Forum. The forum provides a centre of
excellence for brand marketing, which delivers
new skills to the industry and promotes long
term success of food and drink brands.
12
Irish beef back in Paris. Minister for Agriculture & Food, Mary
Coughlan and Aidan Cotter, Chief Executive, Bord Bia in Paris to
mark the return of Irish beef to French supermarket shelves for
the first time in eight years.
The quarterly brand fora were supported by
two regional events, a publication of all brand
fora members in an Irish brand directory
and access to exclusive market research
and insights. A trend spotlight, a monthly
information service on hot topics within the
food and drink industry, was also launched.
• Bord Bia ran a market study visit to the US in
2004. Based around Philadelphia and New York,
this extensive itinerary afforded participants
unique insights into best practice marketing
in the US. The visit incorporated presentations
from America’s largest brand owners such
as Campbell’s Soups, to the latest guerrilla
marketing tactics, a plant tour to Hershey’s New
Product Centre of Excellence and store visits.
13
• The “strategic network alliance” marks a new
departure in funding by Bord Bia for Irish
manufacturers to seek out attractive European
markets with opportunities for business
development. Research was undertaken in
2004 and was funded in equal parts by Bord
Bia and the participating companies.
• A number of Irish drinks companies participated
on a Bord Bia trade visit to meet with key
buyers from the Pennsylvania Liquor Control
Board (PLCB). The PLCB is the single largest
purchaser of alcohol in the USA with sales in
excess of $1.3bn, with 635 stores statewide.
Two PLCB representatives also visited
Ireland during Marketplace and again met
with drinks industry representatives.
• Bord Bia organised a market study visit on
behalf of the alcoholic beverages sector to the
Baltic States of Lithuania, Latvia and Estonia.
Representatives from a number of Ireland’s
leading independent drinks manufacturers
held meetings with key importers, retailers
and distributors in each country.
Annual Report and Accounts 2004
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Annual Report and Accounts 2004
Meat and Livestock
In 2004, the value of meat and livestock exports
was €2.2billion, the largest for any single sector.
Beef is the single largest element by a sizeable
margin and has grown by 8% in 2004. Sheepmeat
had the second largest increase in euro terms and
the largest percentage increase. Pigmeat achieved
a smaller increase and poultry exports declined
slightly. Livestock exports had a more difficult year,
mainly due to higher Irish prices and weaker relative
demand from the Italian and Spanish markets.
Beef
Irish beef exports were valued at €1.4 billion in
2004, an increase of 8% on the previous year, even
though the volume of beef available for export was
marginally lower at 497,000 tonnes. The reduced
volume was due to lower supplies and a small
increase in domestic consumption. The higher value
of exports was due to improved market returns,
which is consistent with a 10% rise in average
cattle prices in Ireland. Almost 90% of beef exports
were within the EU, compared to 50% in 2000.
The UK market accounted for almost 55% of Irish
beef exports, reaching 269,000 tonnes - a rise
of 7% on 2003 levels. The market became more
competitive as the year progressed, reflecting
increased domestic production in advance of the
UK’s move to a single farm payment and strong
non-EU supplies, but Irish beef continued to
perform well. The market position of Irish beef in
the UK continues to improve, with over 30% – or
85,000 tonnes, valued at €350 million – going
directly to the multiple retail sector. Similarly, sales
of processed beef showed further growth, reaching
75,000 tonnes – over a quarter of total shipments.
Exports of Irish beef to other EU markets,
including the new Member States, reached
174,000 tonnes. This is a rise of 7% on 2003 levels
and marks an all-time high for such shipments.
Irish beef performed strongly in Italy and the
Netherlands, rising by 14% to 40,000 tonnes
and by 7% to 42,000 tonnes, respectively. Other
important markets that experienced growth
were Scandinavia, at 35,000 tonnes and France,
at 24,000 tonnes. In the new Member States,
strong trade development initiatives, prior to and
since accession to the EU, has led to Irish beef
exports to Hungary, Poland and the Czech Republic.
However, like the UK, the other EU markets
remained quite competitive for much of the year.
Beef exports to international markets (non-EU
markets) declined to 55,000 tonnes, down almost
a third on 2003 levels. This was due to increased
shipments of Irish beef within the EU, a 6%
strengthening of the euro against the US dollar
and increasing competition from South American
suppliers. Russia remained the principal market,
taking 47,000 tonnes, while Algeria re-emerged as
a good market for Irish beef in the final quarter.
The outlook for the Irish beef industry in 2005
remains broadly positive and the market position
of Irish beef is improving across Europe. With
consumption stable, the EU production deficit
is projected to reach 380,000 tonnes in 2005.
This should provide a solid platform for Irish
beef exports to the continent. Most of the key
markets in Europe anticipate higher imports
16
during 2005. Italian beef imports look set to rise
by almost 4%, while French imports are expected
to grow by 1%. Combined with lower export
availability from Germany, this suggests relatively
good market opportunities for Irish beef.
However, there are also a number of risks. These
include the growing presence of non-EU product in
certain market segments. Since 2000, the volume
into the EU has increased by 30% to 536,000 tonnes
in 2004. Further increases are likely in 2005 on
foot of an anticipated rise in Brazilian production.
In particular, this makes trade for hindquarter cuts
very competitive for the Irish industry, given the
prevailing prices for non-EU product. The strength of
the euro against the US dollar looks set to continue
in 2005. This has the effect of making EU beef
less competitive on international markets, while
at the same time boosting the competitiveness
of non-EU beef coming into Europe.
17
It is expected to be at least the second half of
2005 before Over-Thirty-Month beef returns to
the marketplace given the requirement of the
UK government that no changeover will take
place until the Food Standards Agency view the
proposed testing regime as sufficiently robust.
The ending of the Over Thirty Month Scheme
(OTMS) could release an additional 180,000 tonnes
of beef onto the British market in a full year. As
Ireland is the dominant import supplier of prime
beef, this decision could result in a diversion of
approximately 70,000 tonnes of Irish beef from
the UK to other EU and international markets
in a full year. A major marketing effort will be
required to ensure that this beef continues to be
targeted at the premium end of these markets.
World Food Moscow. Looking at Irish beef at the Auchan
hypermarket in Moscow on a trade visit to the World Food Fair were
(L-R) Paddy Moore, Director, International Markets, Bord Bia with
Mark du Colombier, Manager of Auchan hypermarket; Noel Treacy,
TD, Minister of State at the Department of Agriculture and Food and
Ambassador of Ireland to Russia, H.E. Justin Harman.
Key initiatives for 2005 will include an intensive
drive to develop new retail business across all
EU markets, with particular emphasis on France,
Italy, Scandinavia and the new Member States.
Co-branding and promotional drives will see
more identified ‘Irish Beef’ packs on the shelves
of the main retailers throughout this region. The
Chef’s Irish Beef Club has been established and
will expand further to major European centres.
Working with the Department of Agriculture &
Food on the critical issue of access to international
markets will continue to be a major priority.
Annual Report and Accounts 2004
European Meat Forum. Themed Beef - A World of Opportunities the
conference examined key issues facing the European meat industry,
strategies being adopted by the major European retail chains,
changing consumer trends and behaviour and new developments in
packaging and technology. Delegates included 165 buyers from the
retail and foodservice sectors throughout the EU, as well as the new
member states with a combined beef buying power of in excess of
€4 billion. Pictured at Bord Bia’s European Meat Forum was speaker
Dr. Arne Astrup, Professor of Human Nutrition, The Royal Veterinary
and Agricultural University, Frederiksberg, Denmark.
Live Animals
This trade was characterised by competition
on prices, lower feedlot demand in Spain
and Italy, increased supply of calves to the
Netherlands from both Germany and Poland
and a competitive Lebanese market. As a result,
Irish live cattle exports fell by 40% during
2004 to 130,000 head. Trade to Continental
EU markets fell by 50% to 72,000 head. On
the other hand, exports to the UK, principally
Northern Ireland, performed strongly, increasing
by almost 20% to reach 46,000 head.
Nevertheless, Irish live cattle exports are expected
to show steady growth in 2005. There is likely
to be stronger demand for live cattle in Spain
and Italy with the feedlot sector being helped
by a drop in feed costs due to a strong cereal
harvest. The Dutch market also looks set to
have a steady demand for calves for the veal
sector. Further potential for growth exists in
Northern Ireland due to the strong UK demand
for beef. The key issue from an Irish point of
view is the ability of Irish cattle to compete on
price with other suppliers. Trade to the Lebanon
will largely be determined by this factor. Bord
Bia will continue to assist live animal exporters
to grow business in the main markets.
18
Pork and Bacon
The value of Irish pigmeat exports during
2004 increased by 6% to €265 million. This
occurred despite a drop of 3% in export volumes
resulting from lower production levels and an
increase in live exports to Northern Ireland. The
rise in value of exports was due to improved
market returns, consistent with an increase
of approximately 9% in Irish pig prices.
The Irish market continued to account for over
50% of Ireland’s total pigmeat availability of
263,000 tonnes, with demand mainly being
driven by a trend towards convenience-style
processed pigmeat and bacon products.
Exports to the UK and Germany were strong,
with volumes increasing to 62,000 and 13,000
tonnes, respectively. Aggregate exports to the
EU-15 countries were down on 2003 levels. The
rise in sales to Germany did not compensate for
a fall in exports to France and Italy, where trade
was affected by competition from Dutch and
Danish suppliers. Following EU enlargement,
two-way trade between the EU-15 countries and
the new Member States increased considerably.
The new Member States are exporting high
value cuts and importing lower-value product.
While this increased the competition with
Irish pigmeat in existing EU markets, it also
created opportunities for manufacturing
products in the new Member States.
19
Following the absence of US beef and the
decrease of poultry supplies in the Japanese
market, Irish pigmeat exports rose by a third to
surpass 8,000 tonnes. Exports to Russia remained
stable at over 7,000 tonnes despite import
certification issues. Exports to the US eased back
to 6,000 tonnes, mainly due to the unfavourable
exchange rate with the dollar. For 2005, a
marginal increase in Irish pig supplies is forecast,
following a recovery in production as newly
stocked breeding units increase performance.
With EU production levels expected to remain
stable throughout the year, and preliminary
forecasts indicating a further rise in EU prices,
the prospects for Irish pig prices are steady.
The market outlook for exports to the EU is
stable, helped by a steady demand and lower
supplies from the new Member States. However,
with a rise in UK pig output forecast, trade is
likely to remain competitive in this market.
Annual Report and Accounts 2004
On international markets, increased competition
from non-EU suppliers such as Brazil and Canada,
and the ongoing strength of the euro against the
US dollar, will continue to challenge Irish exports
to the US, Russia and Asia. A return of US beef and
poultry supplies to the Japanese market will also
further increase competition for Irish product.
Bord Bia programmes for 2005 will focus on
improving demand on the Home Market,
developing new export opportunities in
the UK and Eastern Europe and seeking
to broaden market spread by gaining
access to new international markets.
Lamb
The value of Irish sheepmeat exports increased by
14% during 2004 to almost €165 million, reflecting a
strong rise in availability and steady market returns.
At the launch of Bord Bia’s pork campaign
entitled Discover the World of Flavour with Pork were
(L-R) Owen Brooks, Director, Home Market; Pat O’ Keeffe,
Chairman, IFA Pigmeat committee; Jack Tuite; Sophie
McCann and Scott Broderick.
The Irish market accounts for over 30% of
sheepmeat output, making it the second most
significant market after France. Lamb consumption
in Ireland increased by 2% to 21,500 tonnes this year.
The French market continues to account for
over 60% of Irish sheepmeat exports. At 33,000
tonnes, this is a rise of 4,000 tonnes, or 14%, on
2003 levels, facilitated by an increased supply of
sheepmeat in Ireland in 2004 and a rise of 2%
in France’s import requirement. However, the
competitiveness of the market was demonstrated
by the decline of 3% in French producer prices for
lamb. Irish sheepmeat exports to the UK showed
further strong growth to reach 9,500 tonnes.
Trade remains principally in the form of mutton
20
21
for the manufacturing sector. Other important
markets include Germany at 2,500 tonnes, Italy at
1,500 tonnes and Portugal at 1,200 tonnes. French
import requirements look set to be maintained
during 2005, which should provide a reasonably
steady market outlet for Irish lamb. New Zealand
is expected to remain highly price competitive
against both domestic and EU lamb and Irish
exporters will be faced with rising volumes of
New Zealand chilled product. Ireland and France
will remain the most important outlets for
Irish lamb and further development of these
markets is the continuing priority for 2005.
Poultry
The poultry sector refers to all fresh and processed
poultry products. Irish poultry meat exports in
2004 were valued at €249 million, a 2% decrease
on 2003 levels. Processed poultry meats and
prepared products accounted for nearly twothirds of 2004’s total poultry exports. The UK
continues to be the main market for Irish poultry,
accounting for approximately 80% of total exports.
Overall, EU consumption of poultry continues
to increase, with the ten new Member States
Annual Report and Accounts 2004
showing a stronger increase than the EU-15
countries. Ireland now has the highest per capita
consumption of poultry meat within the EU,
at 37kg. In 2004, total poultry meat production
in the EU-15 countries increased slightly as
productivity recovers in both Holland and Italy,
following avian influenza outbreaks in 2003.
In 2005, production in the EU-15 countries will
remain stable at approximately nine million
tonnes. The ten new Member States will see
an increase to almost three million tonnes.
Imports of cooked poultry meat products will
grow significantly, as Asian suppliers adjust
to bans placed on uncooked poultry meat due
to avian influenza outbreaks there. Brazil will
emerge as the leader in broiler meat exports;
it surpassed the US in the 2004 forecasts
and is expected to continue in 2005.
Eggs
Bord Bia at the EU Presidency workshop for caterers.
(L-R) John Howard, Consultant Master Chef; Michael Duffy, former
Chief Executive, Bord Bia and Pierre Balthazar, Head Chef, Council
of Europe. Bord Bia held a workshop for hotel and restaurant chefs
and caterers involved in preparing food for events during the EU
presidency. Bord Bia briefed chefs on how to ensure the food served
represented the best of Irish ingredients and cuisine.
The retail market for eggs increased by almost
4.5% in 2004, due largely to the trend towards
higher value free-range eggs and an increase
in volume sales. There is good potential for
further increases in sales because per capita
consumption of eggs in Ireland is well below the
EU average. Bord Bia and Irish Egg Marketing have
agreed a three year €1.5 million jointly funded
promotional programme for eggs, produced
under the Bord Bia Quality Assurance Scheme. In
2004, this involved a major advertising campaign
using TV, cinema and public transport media.
22
Annual Report and Accounts 2004
Consumer Food, Dairy and Drinks
Dairy and Food Ingredients
The consumer food, dairy, ingredients and drink
sectors accounted for a combined €4,397 million
in exports in 2004. Exports of dairy products
and ingredients are estimated to have increased
by 6% to €1,860 million in 2004. Good global
demand combined with strong prices produced
a positive export performance for the sector.
The prepared foods sector grew marginally
during the year after negative growth in 2003.
This category is made up of dairy products such
as butter and cheese as well as a variety of food
ingredients for further manufacturing processes.
The value of Irish dairy/food ingredients exports
rose to almost €1.9 billion in 2004, a rise of 6%
over 2003. This performance was very positive,
particularly in light of earlier pessimism. Worldwide
demand remained strong supported by good prices.
Despite the weakening of the US dollar, the overall
value of earnings remained firm because of good
dollar prices and Irish exporters responding well to
particularly good demand for casein. The year was
marked by two major milestones: EU enlargement
on 1st May and the implementation of the Mid
Term Review measures from 1st July, both of
which contributed to considerable uncertainty
among buyers worldwide and to cutbacks in
production in some of the EU-15 countries.
Structural adjustment in the drinks sector
precipitated a decline in beverage exports in 2004,
with values falling by an estimated 6% to €1,016
million. Most individual companies registered a
good performance and, on aggregate, exports
from the island of Ireland are likely to have
compensated for this adjustment. The sector is
set to resume growth from its new base in 2005.
A key competitive challenge for companies
within the sector is to move up the value chain
through innovating and responding rapidly
to changing consumer demand. Currency
remains a key challenge in non euro markets,
combined with relentless pressure on margins
from both competitors and retailers. By far the
dominant trend affecting consumer choice has
been the renewed interest in personal health
and wellbeing. Convenience, a well established
trend in the food and drink industry also
continues to be a strong driver of consumer
choice. Changes in lifestyles and work habits,
and increased financial pressures have led to
a growing need for convenience in all areas.
Irish dairy production is geared towards
maximising the return from quota-controlled
milk production, which can result in considerable
variations from one year to the next in the
product mix. In 2004, overall Irish milk production
increased by 0.5%, with casein having the highest
production increase at 10.8%. Cheese production
increased by 4.5%, butteroil saw the largest
decrease at 17.1%, followed by Skimmed Milk
Powder (SMP) at 7.9%, and Whole Milk Powder
(WMP) at 3.9%. Butter production fell by 2.2%,
while chocolate crumb production fell by 2.3%.
Intervention price cuts of 7% for butter and
5% for SMP led to reluctance among buyers to
make forward commitments, resulting in steady
24
selling into intervention in the first half of the
year. However, with inventories lower than EU
market demand, and good demand internationally,
prices did not fall to the new support levels.
International demand slowed in the second
half of the year due to price resistance among
customers, the weakness of the US dollar and the
EU Commission’s policy of selling off intervention
stocks of butter at below intervention price.
However, SMP and butter both yielded returns
above intervention. World SMP prices increased
by an average of 19.7% on 2003 levels, a result
directly attributable to the reduction in SMP
world output. A similar situation arose for WMP,
with Irish exports to international markets being
up 15.9% in the first nine months of the year.
The market for casein in the US and Europe
remained very strong, further stimulated by
reduced availability from New Zealand and
Eastern Europe, resulting in consistently higher
margin returns. Although Irish cheese production
increased by 4.5%, prices on the EU market were
flat for nine months of the year, though there
were increased returns from whey. Irish exports
of cheese to International markets were up over
53% for the first nine months of the year.
25
The continuing consumer interest in health
and wellbeing has expanded the potential
for added-value exports of health, nutritional,
and functional foods. This continued to be the
focus of Bord Bia’s activities within the sector
in 2004. The programme of events included
a seminar, Health and Wellbeing — The Shape
of Things to Come, on issues such as vitamins
and minerals, dietary options and obesity, and
the regulatory impact on companies targeting
new business within this arena. Sector specific
information services and market customised
services were also provided by Bord Bia.
Concentrating on the development of value added
ingredient exports, Bord Bia organised two market
study visits covering both geographical and niche
market interests, to coincide with relevant trade
exhibitions and conferences – IFT, Las Vegas in
July and HiE, Amsterdam in November. Seven Irish
ingredients companies participated.
Prepared Foods
Defined as ‘food products that have undergone
secondary processing’, these can be sold
as intermediate products, sold into food
manufacturers or to foodservice operators, or
as convenience products for home or on-the-go
consumption. The sector makes up about 26% of
the food industry with export markets in 2004
returning €1.52 billion. Included in the sector are
foods such as frozen ready meals, pizzas, snacks,
confectionery and ambient grocery products.
The biggest challenges facing these manufacturers
are containing costs, accommodating greater
margin demands from retailers, innovating and
developing new routes to market. The sector
comprises mainly small and medium-sized
manufacturers, who supply the domestic and UK
markets. Exports to Britain were up, while exports
to the Netherlands, Italy, Belgium and Sweden
also performed strongly. The major issues facing
those companies exporting to the British market
Annual Report and Accounts 2004
were price competition from domestic UK players
and competitors from continental Europe.
The main retailers favour partnering with larger
players, which leaves small Irish producers
focusing on niche opportunities or pursuing
expansion through the introduction of new
products or through strategic partnerships.
Selfridges Promotion. At the Irish food and drink promotion in
Selfridges were (L-R) Paul Kelly, Chief Executive of Selfridges,
Michael Murphy of Bord Bia in London and Irish Ambassador to
the UK, H.E. Daithi O’ Ceallaigh
Despite some strong performances, the
continental market remains diverse and
challenging. A single market for food has yet
to emerge which means that markets must be
tackled individually. However, a number of smaller
companies are targeting niche opportunities in
selected markets. Bord Bia will be encouraging
this and driving opportunities in this area along
with pursuing opportunities in the higher
volume sectors for the larger manufacturers.
Bord Bia will continue to develop new contacts in
the retail, foodservice and manufacturing sectors
to drive new business in addition to deepening
its relationship with existing contacts in Europe.
Frozen Foods
Britain is the biggest market for the frozen food
sector. The value of Irish exports to Britain was
up by over 10%. The main frozen food products
exported were frozen ready meals and pizzas.
In response to price deflation in the sector,
manufacturers broadened their ranges of premium
offerings to try to regain lost margins. To create
further platforms for growth, manufacturers are
catering to the consumer trends towards healthier
eating, more authentic flavours and indulgence.
26
Organics
The value of the European organic market is
expected to surpass €17 billion in 2007, with dairy
(€4.6 billion), bakery and cereals (€4.5 billion),
fruit and vegetables (€3.7 billion) and meat (€3.2
billion) being the main category opportunities.
Most consumers have a positive attitude towards
organic food particularly from an environmentally
friendly perspective. Other issues that concern
them are food integrity, health and wellbeing and
local origin. Consumers buying into this category
are often concerned by issues such as genetically
modified (GM) foods, pesticides and food scares.
Although the multiple retailers in Ireland play
an important role in bringing organic goods to
market, organic farmers are more likely to sell
directly to consumers than are conventional
farmers. Selling directly to the consumer has
been greatly assisted by the growth of the
farmers’ markets. There are now over 80 in the
country. In September 2004, Bord Bia and the
Department of Agriculture and Food's Organic
Marketing Development Group launched an
information booklet for the Irish consumer. The
booklet contained basic information on organic
food, labeling requirements and existing organic
symbols, the benefits of buying organic food and a
calendar of seasonal availability of organic produce.
Confectionery
27
The confectionery sector is made up of companies
supplying products based on chocolate, sugar
and flour. As in the frozen foods sector, there has
been a trend towards ‘premiumisation’ and this
is where the real value growth is being achieved.
Exports of chocolate increased by over 54% in
2004 as a result of an aggressive roll-out of new
products and the targeting of new distribution
channels in Britain. Britain continues to be the
main market but there has been some penetration
of Continental and US markets.
Ambient Foods
The ambient sector is comprised of suppliers
operating within the cereals, sauces, soups, jams/
preserves, condiments, ambient meals and
home baking categories. These companies, in
the main, occupy leading brand positions in the
domestic market. Some are now successfully
exporting, securing notable listings with multiple
retailers in the UK. In recent years the main focus
has been on supplying to retail but there is now a
growing focus on foodservice opportunities in the
British market. There has been some penetration
into EU markets and niche ethnic markets in the
US. In addition, some suppliers met with success
when they availed of co-packing opportunities.
Information and market insights are key to helping
Irish suppliers in export markets. During 2004 Bord
Bia further developed its strategy of providing
company-specific information and services to cater
for the diverse requirements of suppliers operating
in the prepared foods sector. The Gap Analysis
service, which is a consumer-led approach, helped to
deliver new business opportunities and resulted in
new listings. The service provides a category solution
to the buyer, ensures that new product development
is driven by consumer need and, therefore, increases
the chances of success. The Brand Audit, Brand
Creation and Brand Design services were very
popular with clients during the year.
Small Business and Speciality Foods
Smaller Irish companies in the speciality food
sector have seen strong sales growth over the
past year targeting the two key markets of Ireland
and Britain. Speciality foods now have a total
output value of €430m at factory gate prices,
a 13% increase on 2003. The sector continues
to expand and there are over 330 small food
producers successfully marketing their products to
independent and multiple retailers. Trade listings
have increased and distribution broadened to
reach a wider consumer base. The growth is being
driven by increased consumer demand for variety,
convenience and the perceived health benefits of
speciality products. From a low base, this segment
continues to build incremental sales.
Britain and Ireland continue to be the core
geographic markets for the sector, although
certain categories such as farmhouse cheeses sell
in over 25 geographic territories worldwide. The
USA is a growth market for Irish farmhouse cheese
and, more recently, France, Australia and Japan
have emerged as markets for the category.
During 2004, Bord Bia’s Small Business programme
focused its trade marketing on identifying emerging
opportunities, securing new listings and sustaining
existing business. A number of events on managing
key accounts and distribution were organised to
help build the capability of small companies.
29
Bord Bia worked with a number of local authorities
and rural communities to establish a network of
farmers’ markets around the country. As an alternative
route to market, these markets provide small
producers with a valuable outlet for local produce,
assist new start-ups and maintain local employment.
The TASTE Council, co-ordinated by Bord Bia,
continued to build awareness for the speciality
and artisan sector and made a number of policy
submissions to government committees about the
role and importance of the sector.
Bord Bia, in conjunction with Slow Food Ireland, will
sponsor the first University of Gastronomic Science
in Italy. The curriculum will include a programme
on the science, history, culture and gastronomy of
Irish food, and participants will be from all over
the world. Slow Food is a growing consumer food
movement with over 100,000 members.
Annual Report and Accounts 2004
In conjunction with the Irish Exporters Association,
Bord Bia was partner in the True Marketing
Programme, an export market entry programme
for small food companies which focused on the UK
market involving the Welsh Development Agency.
Beverages
The beverage sector in Ireland includes both
multinational and indigenous companies involved
in the production and marketing of a wide
range of brands including spirits, liqueurs, beers,
carbonates, fruit juices and bottled waters. In
2004, exports of beverages (including all alcoholic
and non-alcoholic beverages and juices) declined
by 5% to just over €1 billion. This fall was due to
some structural changes within the industry and
on the island of Ireland, and disguises the fact
that some companies reported strong growth in
sales throughout the year.
Exports of Irish cream liqueurs registered
excellent growth in the key UK and US markets.
The production of cream liqueurs is the most
important category in the spirits sector,
accounting for approximately 50% of total sector
exports. Irish whiskey distillers and marketers
reported a very successful year with growth in
exports valued at 11%. Irish whiskey continued to
be one of the fastest growing segments among
premium whiskeys worldwide. Markets that
showed good growth potential for Irish whiskey
include Spain, Eastern Europe, South Africa, Russia
and Latin America. As a result of difficult trading
conditions in European markets, and consumer
trends towards seeking out alternative, lighter
products, exports of malt beer declined.
30
Issues facing the overall alcohol beverage industry
continue to be focused on concerns about
responsible drinking, health and lifestyle issues.
On the domestic market, the introduction of the
smoking ban and the increased level of duties were
accompanied by a decrease of 6.3% in on-trade sales.
Currency fluctuations had an adverse effect on
companies selling their products in key US and UK
markets. During 2004, Bord Bia organised a series
of activities specifically designed for companies in
the drinks industry. This programme was developed
in consultation with the industry and included
participation at international trade shows such
as WSWA, Las Vegas; Tax-Free World Association,
Cannes and Marketplace Ireland, Dublin.
Britain remained the largest market for Irish
beverage products accounting for approximately
40% of exports. The US is the next most
important single market, at 19%, and its potential
for development has caused many companies to
take an increased interest in it.
31
Meeting new industry contacts and identifying
new market opportunities is a key focus for the
Irish drinks industry. A buyer contact event was
held in Harrisburg, Pennsylvania, USA with key
personnel from the Pennsylvania Liquor Control
Board (the largest single purchaser of alcohol
in the US). Subsequently, representatives from
six US Liquor Control Boards and two Canadian
Liquor Control Boards visited Marketplace Ireland
in Dublin in September 2004 and met with Irish
company representatives. This buyer-supplier
event has resulted in new and expanded listings
Winner of the Farmleigh Gold medal for artisan bread.
Jean Baptiste Kapral, La Maison des Gourmets, Dublin (centre);
Muiris Kennedy, Client Services Director (left), Bord Bia and David
Byers, Commissioner of the Office of Public Works (right). The idea
of the Award for artisan bread emerged from the Food at Farmleigh
markets and was developed in collaboration with Bord Bia and the
National Bakery School at DIT.
for several companies. Building on study visits
carried out in 2003 to the Czech Republic, Poland
and Hungary, Bord Bia organised study visits to
Lithuania, Latvia, and Estonia. As a result of these
visits, several companies are now doing business,
are beginning to build brand awareness for their
products and also for Ireland as a source of quality
beverage products.
Annual Report and Accounts 2004
Foodservice
are tending towards gourmet home cooking or
The Irish foodservice market was valued at €5.7
billion (€3.2 billion beverages, €2.5 billion food) in
2004. Dramatic changes in consumer eating habits
in the last ten years have resulted in strong growth
in the foodservice market. Food consumed outside
the home is predicted to continue to take a larger
share of overall food expenditure. A number of
factors have contributed to this trend, in particular,
increased consumer affluence, growth in eating out
as an everyday activity and an emerging grab-andgo and feed-me-now food culture. The snacking
revolution and increased occasions for on-the-go
food consumption are important market drivers.
is also benefiting from the consumer shift from
The low-carb trend fell back in 2004. There were
just 3.6% of US consumers reportedly on lowcarb diets at the end of 2004, compared with
9% at the end of 2003. Consumer interest in
nutritious menu options while dining out continues
to increase. There is a move away from mass
produced foods and a demand for unique flavours
at all levels of dining. Fast food with style and
healthy better-for-you options, such as the new
salad range at McDonalds, is a growing trend.
high quality takeaways. The foodservice market
materialistic purchases to experiential spending.
In the UK, one meal in five is now eaten outside
of the home. UK retailers are investing more time
and resources into foodservice, with new formats
incorporating food-to-go and there are also an
increasing number of partnerships between
retailers and foodservice operators. Bord Bia held
45 meetings with UK foodservice buyers and
development chiefs to present the Irish food
industry; organised three inward buyer visits by
the major operators, the Spirit Group, Greene King
and Brammer Dixon; facilitated four workshops
for companies looking to enter the market; held 24
individual client consultations to assist companies
develop or fine tune their market strategy;
produced 52 news reviews on market trends and
developments; published one report providing
an overview of the market and a planning guide
on how to enter it and held a seminar featuring
speakers from Mitchells & Butler, 3663 and Subway.
Bord Bia also published two market directories
Diners are also looking for smaller portions and
a greater variety of food. Spanish tapas, Chinese
dim sum and Greek meze are all appearing more
on menus and tap into the quick dining trend.
comprising information on routes to market and
As consumers dine out more frequently, they are
increasingly likely to have set expectations as to
how a dish should look and taste. Meanwhile,
general cooking ability is in decline. To replicate
the restaurant experience at home, consumers
the Irish foodservice market, and commentary on
key operators in the major market segments.
This provided profiles of some 170 foodservice
operators in both the profit and cost sectors
throughout the island of Ireland, an overview of
key trends and market dynamics. Two seminars,
attended by over 70 companies, were organised
to present the information, one focusing on
the profit sector, one on the cost sector.
32
Annual Report and Accounts 2004
Horticulture
Bord Bia supported businesses in their initiatives
to maintain and grow domestic market share
for horticultural produce through its Business
Development Programme. This programme also
develops the business skills required to meet the
changing needs of industry. Business management
training courses were organised for the nursery
stock, vegetable and mushroom sectors. These
courses included modules on marketing and sales,
strategy and planning and financial management.
Bord Bia’s domestic Nursery Stock Programme
identified import displacement opportunities
and promoted substitutes. A review estimated
that nurseries, garden centres and the landscape
sector import €20 million worth of nursery
stock annually and identified the type of plant,
country of origin and the value of plant lines
being imported. Almost 75% of all imports are
from the Netherlands. The review recommended
a number of import substitution opportunities for
the Irish nursery sector. Bord Bia will work with
the sector in 2005 to pursue these opportunities.
Two workshops aimed at reducing the growing
reliance of Irish garden centres on foreign plant
imports were organised by Bord Bia. The focus of
these workshops was on market-led new product
development. In association with the Irish Hardy
Nursery Stock Association, Bord Bia organised and
financed four trolley fairs in 2004. A trolley fair is
an event at which growers display and sell their
plants, enabling garden centres and landscapers to
view and buy a large range of Irish products at a
single location. Both buyers and growers can build
business relationships at trolley fairs and Bord Bia
will continue to support this initiative in 2005.
Bord Bia organised a two day amenity conference,
The Plant(ed) World, in October. International
and Irish experts from landscape design,
business development, retail and research
backgrounds addressed the conference,
and highlighted the social, health and
environmental importance of horticulture
in addition to its economic contribution.
Bord Bia was actively involved with a number
of other state agencies and government
departments in addressing environmental
issues impacting on the horticultural
industry such as waste management, carbon
energy tax and the nitrates directive.
Bord Bia continues to work closely with the
Department of Enterprise, Trade & Employment
to meet the labour shortages in the horticultural
sector. This was achieved through two schemes:
the Work Permit Scheme for migrant workers
in horticulture and the Seasonal Horticultural
Workers Scheme (SHWS), which matched seasonal
labour demands with an adequate supply of
suitable skilled labour. With EU enlargement
in May 2004, the requirement for the Work
Permit Scheme ceased. However, the SHWS
continues to play an important role in meeting
demand. Over 200 students from Poland,
Lithuania and the Ukraine were placed with
60 host growers between May and October.
Bord Bia, in recognition of the multicultural
nature of the horticultural workforce, joined
34
with the Health & Safety Authority to
produce an Essential Health & Safety Guide
for Horticulture in five languages – English,
Latvian, Lithuanian, Polish and Russian.
Promotions
Bord Bia promotions for the fruit and vegetable
sector continued to focus on under 35 year olds
because consumer research indicates that their
consumption of fruit and vegetables is lower than
average. There were a number of promotional
campaigns, including a national radio advertising
campaign to promote Irish potatoes and a national
billboard campaign promoting the convenience of
mushrooms.
The mushroom campaign is in its second year of a
three year programme funded by the EU, producers
and the Department of Agriculture and Food. New
recipes were developed for fresh produce and
posted on the Bord Bia website. Sixty seven retail
outlets took part in the Bord Bia Fresh Produce
Retail Awards for promotion and merchandising of
fresh produce.
35
First-time homebuyers were the main target
group for amenity promotions. The focus was
on the benefits of plants/flowers in the home
and garden, and as gifts for special occasions. A
national billboard campaign, featuring high profile
garden designer Diarmuid Gavin, encouraged
novice gardeners at the start of the gardening
season in Spring. Bord Bia sponsored a number
of events that raised the profile of horticulture
– these included the Rare and Special Plant Fair,
the Young Horticulturalist of the Year Award
and the Tidy Towns and Entente Florale Awards.
A public relations campaign highlighting ‘real’
Christmas trees was conducted in early December.
A submission for the promotion of plants
co-ordinated by Bord Bia, was approved for funding
by the EU. This programme, co-funded by the EU,
the industry and the Department of Agriculture
and Food, begins in 2005.
Amenity Export Programme
In 2004 the Amenity Export Programme focused
on a group of 11 nursery owners, delivering a
specific pre-export programme to them through
site visits, workshops, telephone and email
consultancy. The profile of exporters was updated
and published on CD-ROM for distribution to
the trade.
Bord Bia organised a study tour for plant retailers,
nurseries and cash-and-carry suppliers to the
landscape trade and large plant importers in
the UK. The Irish nursery owners and managers
used this opportunity to establish business
relationships and promote their products. A
second tour to the Netherlands was held in
November and incorporated visits to wholesale,
retail and cash-and-carry outlets, as well as a tour
of the Dutch Plant and Flower Auction’s operation.
Research into opportunities in Continental
European markets, commissioned by Bord Bia,
was presented to exporting companies and made
available to clients via Bord Bia’s Client Portal.
Although this research identified a number of
excellent opportunities for potential exports, it
also warned that the challenges presented by
Annual Report and Accounts 2004
Quality
Christmas tree presentation to An Taoiseach, Bertie Ahern, TD.
(L-R) Noel Moran, Managing Director, Emerald Group (Winner of
the National Christmas Tree Award 2004) and Aidan Cotter, Chief
Executive, Bord Bia.
logistical, language, and climatic issues will have
to be addressed in order to exploit this potential.
Irish nurseries exhibited plant material at GLEE,
the annual trade show for the garden and leisure
industry in Birmingham. Bord Bia co-ordinated
the Irish presence, now in its fourth year. Irish
Christmas tree growers also used the opportunity
to display their products, with a view to
developing a co-ordinated approach to exporting
Christmas trees to the UK in the future.
Promoting quality within the fresh produce
supply chain continued to be a priority for
Bord Bia. The Bord Bia Quality Programme
for horticulture includes both the food and
non-food sectors, and actively promotes the
achievement of the highest standards of quality
in the production, handling, packing, storing
and transporting of fresh produce and plants.
Key to the Quality Programme continues to be
the independence of the National Standards
Authority of Ireland (NSAI). When inspecting
and certifying producer and packer adherence
to the Bord Bia Specification for Horticultural
Producers. In 2004, approximately 500 enterprises
participated in the inspection programme. The
NSAI facilitated the inspection of mushroom
farms to check if they adhered to the EUREP
GAP standard, as required by certain sectors of
the export market. This was highly significant,
ensuring that Irish mushroom marketing
companies could continue to supply the UK
market. The Quality Scheme for the Prepared
Vegetable Sector was introduced in 2004.
Inspections to this new standard begin in 2005.
The development and expansion of the
Quality Programme in the non-food sector
continued. The annual Garden Centre Quality
Awards attracted 45 entries and 18 nursery
stock producers participated in a customised
inspection and certification programme.
Quality schemes are also being developed in
the bulb and landscape sectors, with progress
also being made in the development of a
quality manual for the Christmas tree sector.
36
Edible Horticulture
2004 was a difficult year for horticultural growers.
Continuing rationalisation and consolidation across
all of the sectors at primary production level was
evident. The number of growers continues to decline,
while their scale of operations increases.
Mushrooms
In the mushroom sector (traditionally the most
valuable within horticulture) there has been a
sharp decline in grower numbers in recent years,
from 465 in 2001, to less than 180 in 2004. Output,
however, remained relatively unchanged from
the 65,000 tonnes recorded in 2001. The growers
remaining in the sector are increasing their scale
of operation and investing in their businesses.
The value of the output was €115 million in 2004
compared to €128 million in 2001. An extremely
competitive marketplace drives the changes in the
sector. Over 80% of Irish mushroom production is
exported to the UK, so pressure in that market has
significant implications for Irish growers. Aggressive
competition from the Dutch and Poles has resulted
in lower prices. The practice of auctioning for
business, conducted by a number of multiple
retailers, has lowered prices further.
37
Bord Bia continued to assist the sector by
participating in the Mushroom Task Force,
addressing the quality requirements of the
market, developing producer organisations,
promoting mushrooms on the domestic
market and conducting market research in the
UK. Bord Bia has also been actively involved
in resolving environmental issues such as
disposal of spent mushroom compost, and
the implementation of best practice in the
manufacture of mushroom compost.
Protected Crops
The protected crop sector also experienced lower
prices in 2004. Coupled with increasing costs
of production, this has led to a reduction in the
number of growers in the sector. Energy and labour
costs are particularly high for tomato, lettuce
and cucumber growers. The value of the sector in
2004 was €18 million, with 95 producers growing
on 192 hectares. Bord Bia has assisted protected
crop growers in dealing with a number of priority
Annual Report and Accounts 2004
issues by increasing the availability of plant
protection products, providing a seasonal workers
scheme and adapting the Quality Programme to
meet market requirements.
Potatoes
In an effort to align supply with demand, the area
on which potatoes were grown was reduced by 8%,
from 13,725 hectares in 2003 to 12,604 hectares in
2004. However, there was a significant increase
in yield, with 506,000 tonnes produced in 2004
compared to 450,000 in 2003.
Launch of the Seasonal Workers Horticultural Scheme.
There are currently 732 growers in Ireland, with
the largest 150 of these producing over 75% of the
potatoes grown. This sector will see continued
rationalisation in a market with high penetration
but where consumption is declining. While 95%
of households are buying potatoes, they are
doing so less frequently and in lower volumes
on each occasion. Bord Bia compiles the annual
National Potato Census and provides other market
information to the sector. In 2004, it developed
new potato recipes and conducted a national
radio campaign highlighting the convenience of
homegrown potato varieties. It also sponsored the
National Potato Conference.
Field Vegetables
The field vegetable sector is the third most important
horticultural food sector valued at €57 million in
2004. It was a relatively good growing season for the
field vegetable sector, arising from favourable weather
and strong market demand. The area in which main
vegetable lines were grown remained stable, with
38
little or no change in the minor lines. Overall, there
was very little surplus produce on the domestic
market. Cabbage and carrots remain the two most
important crops, both in terms of production and
value, worth €7 million and €11 million respectively.
The Planted World. The growing market demand for plants
was highlighted at Bord Bia’s first conference for the gardening
industry. (L-R) Aidan Cotter, Chief Executive, Bord Bia; David
Domoney, horticulturalist, TV presenter and garden designer;
Brendan Smith, TD, Minister of State at the Department of
Agriculture and Food.
Soft Fruits
39
Likewise, 2004 was a good year for strawberry yields
and strong consumer demand led to good market
conditions for most of the season. The sector produces
77%, or €19.2 million, of its output value as indoor
strawberries. A combination of improved growing
systems, growing media and growing structures has
extended the growing season to the end of October.
Bord Bia ran a promotional campaign in June to
coincide with surplus fruit at that time.
Amenity Horticulture
The amenity sector is valued at approximately
€72 million at production level, of which the main
crops are hardy nursery stock which accounts
for 57% of output value; bedding plants and
Christmas trees accounting for 15% and 14%
respectively; followed by potted plants and cut
foliage, accounting for 7% and 5% respectively.
Annual Report and Accounts 2004
The remaining 2% is made up equally of bulbs
and cut flowers, mainly daffodils. As a result of
the increased number of growers in the bedding
plant sector, amenity production increased
by nearly 9% between 2003 and 2004.
However, from mid-June onwards, sales of
bedding and other protected ornamentals fell
back by as much as 40% compared with previous
years. Foliage sales, however, were strong
throughout the spring and summer months.
The buoyant sales in nursery stock in the first
half of 2004 ceased abruptly in mid-June,
primarily as a result of the adverse weather. As
the bad conditions persisted, sales of gardening
items through garden centres and other retail
outlets remained flat, leaving many growers and
retailers with unsold stock. As a result of the
bad weather, and despite an increase in amenity
production, overall retail sales were down 10% on
2003. The autumn sales remained static at best,
with many growers holding on to or replanting
this year’s stock in preparation for next season.
The increasing number of imports competing
directly with domestically produced nursery
stock is putting pressure on Irish nurseries,
especially in difficult seasons such as this.
Landscape
Bedding Plants
Bedding plant output increased substantially
from €3.7 million in 2003 to €9.7 million in 2004,
mainly as a result of an increase in the number
of producers and a corresponding increase in
acreage given over to this crop. The total value
of the protected ornamentals and bedding
plants sector is approximately €14 million,
compared with €12.3 million the previous year.
The fine weather during the early part of the
season resulted in strong sales for the bedding
industry, securing this overall increase in output.
The landscape sector, on the other hand, has
had a very good spring and summer season
with most businesses working consistently to
keep up with demand. Over the medium term,
the landscape industry is expected to continue
growing and increasing in importance in relation
to its use of hardy nursery stock and other
amenity products. The Bord Bia Landscape Quality
Programme was launched during 2004, with 18
businesses coming on board for the pilot year.
Bulbs
Although bulb market prices strengthened slightly
on last year, they did not reach expected levels.
Despite serious concerns about the future of
the bulb sector, increased returns were achieved
this year. The sector is worth approximately €0.8
million, which includes cut flowers and bulbs,
mainly daffodil species. Exports to the United
States decreased substantially on last year’s
figures, while exports to Europe increased. The
decrease in export sales to the US was mainly
due to the strength of the euro against the
dollar. Quality is becoming the most important
competitive factor in the trading of bulbs.
Going forward, Ireland’s disease-free soil status
and the superior quality of the bulbs produced
will work strongly in favour of the industry.
40
Annual Report and Accounts 2004
Quality Assurance
Quality assurance is a prerequisite for developing
and maintaining viable business in the food
sector. In recent years, Bord Bia has been active
in implementing quality assurance schemes
across a range of products. Currently, schemes
are operating in the beef, pigmeat, poultry,
egg and horticulture sectors. Expert groups,
representing producers, processors and the
regulatory authorities, developed these schemes.
The objectives of the quality assurance schemes
are to give customers added assurance about the
origin, integrity and traceability of products, and
to reinforce Bord Bia’s promotional activities.
In 2004, Bord Bia in association with the industry
began implementing the revised EN45011
Beef Quality Assurance Scheme. This involved
selecting an independent farm auditing body
and developing a certification process. The new
scheme will be fully operational from 2005.
2004 also saw the launch of a quality assurance
scheme in the poultry sector. The need for this
scheme arose because of a demand by customers
and consumers for more information about the
origin and identification of the flock, along with
evidence of the controls in place at all stages
of supply. The scheme aims to identify quality
assured product with a country of origin logo.
The revision to the Pigmeat Quality Assurance
Scheme was completed, bringing it into line
with the requirements of the benchmark
standard EN45011. This scheme will be issued
in 2005 and will involve independent auditing
and certification of producers and processors.
Launching Bord Bia’s Origin Ireland label for pork and
bacon were Ms Mary Coughlan, TD, Minister for Agriculture
and Food; Aidan Cotter, Chief Executive, Bord Bia; James
Brady, Secretary, IFA Pigmeat Committee.
Quality assurance is a market necessity, and the
eventual operation of all schemes to the EN45011
standard will enhance the competitiveness of
quality assured product in the marketplace.
Féile Bia – Certified Farm to Fork
Féile Bia is a year round programme that
emphasises the importance of food sourcing in
hotels, restaurants, pubs and workplaces throughout
the country. Féile Bia was introduced in 2001 in
response to growing consumer concerns about
the origin of the food on offer when eating out.
Féile Bia is the consumer’s reassurance that the
fresh beef, lamb, pork, bacon, chicken and eggs
being served are fully traceable from farm to fork.
In 2004, a new outdoor plaque was introduced
42
The Ireland the Food Island brand served as
an overall banner in all overseas trade activities
such as exhibitions, media launches, promotional
literature, in store promotions and seminars. On
the domestic market, the brand appeared as part of
the 2004 Golf Challenge, and will serve as the key
brand message in all activities associated with Bord
Bia’s joint sponsorship of the Ryder Cup in 2006,
and in the run up to this event.
Trade research is being undertaken to assess how
the capabilities of the Irish food and drink industry
can continue to be communicated to the trade in a
changing marketplace.
The Brand Forum
Féile Bia Award Winners 2004. Lacken House Restaurant, Kilkenny
won the Féile Bia Award, sponsored by Bord Bia, in the 2005
Georgina Campbell’s Guide.
to increase visibility for Féile Bia members
and awareness of the programme among
consumers. Membership of Féile Bia is on
a voluntary basis and over 1,300 outlets
nationwide have joined the scheme to date.
Ireland the Food Island
43
Bord Bia continued to promote the capabilities
of the Irish food and drink industry to the trade
in targeted overseas markets through a variety
of activities which incorporated the Ireland the
Food Island brand. This umbrella brand portrays
the industry’s capabilities in terms of its green
and natural image, combined with high quality
standards and innovative technology.
The Brand Forum, established in 2001, provides
assistance and inspiration to food and drinks
companies interested in choosing the branded route
to market. The forum focuses on key insights and
branding and provides a unique opportunity for
ideas to be exchanged and developed, for networking
among peers and for the sharing of best practice
ideas in brand development and management.
The forum allows members to share their
enthusiasm for creating and marketing strong Irish
brands with their peers and the food and drink
industry at large – in Ireland, Britain and beyond.
In 2004, Bank of Ireland Business Banking became
official sponsors of the Brand Forum.
The Forum hosts over one hundred industry
representatives on a quarterly basis in Dublin,
and bi-annually on a regional level. Its key focus
is to address issues specifically pertaining to
Annual Report and Accounts 2004
Brand Forum Pictured at Bord Bia’s End of Year Brand Forum
partnered by Bank of Ireland Business Banking were (l-r) Richard
Burrows, Keynote speaker and Joint Managing Director of Pernod
Ricard and Chairman of Irish Distillers; Philip Lynch, Chairman,
Bord Bia; Brendan Smith TD, Minister of State at the Department
of Agriculture & Food and Dan Mc Laughlin, Chief Economist, Bank
of Ireland.
brand marketing in the food and drink arena.
Member food and drink companies range from
multinationals to small enterprises.
Among the new initiatives launched in 2004 was
Trend Spotlight, a monthly information service that
addresses hot topics within the industry, major
food and drink trends and the implications and
opportunities for Irish food and drink companies in
relation to these trends. A Membership Directory for
the Brand Forum, was also launched. A showcase of
Irish food and drink brands, the directory has been
marketed to the national and international trade.
Marketplace Ireland
Fifty four companies met with two hundred and
twenty five buyers over the course of two days at
Marketplace Ireland in September 2004, with over
1,330 meetings held. In the immediate aftermath
of the show 100% of companies surveyed said they
felt confident it would lead to new business.
Sixteen companies are already conducting new
business as a result of exhibiting at Marketplace
Ireland. These companies expect to achieve a
turnover in the next year of over €9 million. The
general view from exhibitors was that Marketplace
Ireland provided a well organised forum for
suppliers to meet buyers.
Bord Bia’s overseas offices have reported that,
even in markets where there has been no business
signed to date, Marketplace Ireland 2004 has
significantly improved relationships with buyers
44
who attended and the image of Irish food and
drink products among this audience.
Event Services
Reflecting the current interest in opportunities
in the Far East, Bord Bia exhibited at three trade
fairs in China. This included participation for the
first time at SIAL China in Shanghai, International
Meat Industry Show in Beijing and the China
Agriculture Fair. The trend towards sector focused
shows continued with confectionery (ISM),
ingredients (International Food Technology Show),
health ingredients (HiEurope), travel retail (TFWA),
speciality food (Slow Food) and livestock (Royal
Highland) all being targeted.
The meat and dairy sectors participated at
international flagship shows, such as SIAL in
Paris and World Food Moscow. The importance
of the Italian market to the meat sector was
demonstrated by an all meat industry presence
at CIBUS in Parma. The Ireland the Food Island
umbrella was used at all international exhibitions,
with 52 Irish companies participating under the
banner during 2004.
45
Bord Bia organised 16 conferences, including the
European Meat Forum in Dublin, a health and
wellbeing seminar, a poultry conference and
The Plant(ed) World. In addition to Marketplace
Ireland, events organised included an informal
visit to Garinish Island, Co. Cork, by the EU
Ministers of Agriculture and Bord Bia’s Steak
Bar at the National Ploughing Championships.
Twenty six individual itineraries were also
organised in 2004.
At the opening of Bord Bia’s Marketplace Ireland in Croke Park
were Joe Walsh TD, Minister for Agriculture & Food; Tim Mason,
Marketing Director, Tesco plc and Aidan Cotter, Chief Executive,
Bord Bia. 53 Irish food and drink companies met with 225
international buyers over two days at 1300 individual meetings.
Buyers at the event represented companies with a combined
purchasing power in excess of €140bn. The business exhibition
and seminar was organised by Bord Bia in a drive to increase
exports of Irish food and drink.
Information Services
Bord Bia serviced just short of three thousand
inquiries from Irish companies and other
interested parties. Independent research among
Annual Report and Accounts 2004
companies reports a high level of satisfaction
with this service. Bord Bia’s public website (www.
bordbia.ie) had over 125,000 ‘unique visitors’
during 2004. The site was substantially revamped
in order to incorporate the content from the
award winning Bord Glas site subsequent to the
amalgamation. Bord Bia continued to develop
its extranets in 2004. While the registered
user base for the two extranets passed the
500 mark, the Client Portal was revamped in
response to independent research among users.
Usage of the Client Portal was increased by the
introduction of a number of new eAlerts that
enable Bord Bia to bring relevant and recent
news to the attention of its users. For example,
one eAlert combines information on new
products, packaging, flavours and retail trends
in order to provide inspiration for innovation.
Research among consumers in Britain and Ireland
was commissioned to glean insights on the
trend towards value. This will be reported on in
2005. An updated directory of foodservice buyers
throughout Ireland was produced and has proved
popular with Irish food and drink manufacturers.
Exploratory papers were published on health and
wellbeing and ethnic markets for meat. These
papers are based on secondary sources only
and seek feedback from the industry on how
subsequent research, using primary sources, might
be best directed. They are available in printed form
or through the Client Portal.
Marketing Finance
Two marketing grant programmes, the Marketing
Improvement Assistance Programme (MIAP) and
the Market Participation Programme (MPP), were
continued by Bord Bia in 2004. Eligibility for both
programmes was restricted to SME food and drink
companies. Under the MIAP, companies dealing
with specific food products, which included
farmhouse cheeses, bio-yogurts, chilled dairy
products, jams, preserves, edible horticulture
and charcuterie, received grant assistance
for marketing activities. Under the MPP, the
recipients of the grant assistance were companies
manufacturing other products, mainly chocolate,
confectionery, sauces and alcoholic drinks. A total
of 104 applications were received in 2004 for grant
assistance. One hundred and one companies were
paid grants totaling €349,992.
North South Programmes
Bord Bia continued its cross border programme
with the Northern Ireland food industry bodies,
including the Department of Agriculture & Rural
Development, Invest Northern Ireland, InterTrade
Ireland and the Northern Ireland Food & Drink
Association. The programme centred around
market development activities. It included a visit
to the US to study best practice branding; the
publishing of the North/South Speciality Food
Directory, featuring profiles of over 200 companies
on both sides of the border; capability building
workshops for small companies and the All
Ireland Garden Centre Awards. These activities
reflect increasing co-operation to achieve better
economies of scale and to share costs for joint
marketing initiatives.
46
Annual Report and Accounts 2004
Corporate Statement
Governance
Ethics in Public Office
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/Director is responsible
to the Board for ensuring that procedures are
implemented and that relevant legislation,
regulations and guidelines are complied with.
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.
Equality
Seamus Kenny Secretary/Director, Bord bia
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.
48
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.
Board Responsibilities
49
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
Annual Report and Accounts 2004
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.
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.
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.
50
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:
• 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.
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.
51
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
At the Bord Bia Bord Glas amalgamation were (L-R) Aidan Cotter,
Chief Executive, Bord Bia, Seamus Kenny, Secretary/Director,
Bord Bia, Paddy Moore, Director of International Operations and
Michael Maloney, Director of Horticulture and Quality Assurance,
Bord Bia.
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.
Annual review of controls
I confirm that in the year ended 31 December 2004
the Board conducted a review of the effectiveness
of the system of internal financial control.
On behalf of the Board
Angela Kennedy
Chairman
Annual Report and Accounts 2004
Main Board
Membership at 31 December 2004
Changes during 2004
Chairman*
Resigned 7 September 2004:
Mr David Callinan, Teagasc
Members
Appointed 14 September 2004:
Mr Kieran Dunne
Mr Philip Lynch, Chairman, IAWS Group
Mr Dan Browne
Managing Director, Dawn Meats (Grannagh) Ltd.
Ms Marian Byrne
Principal Officer, Department of Agriculture & Food
Dr Noel Cawley
Managing Director, The Irish Dairy Board
Mr John Dillon
President, Irish Farmers’ Association (IFA)
Mr Michael Dowling
Company Director, Visiting Professor UCC and Head of Agri
Strategy, AIB
Mr Kieran Dunne
L & K Dunne Nurseries
Mr Michael Kilcoyne
Chairman, Consumers’ Association of Ireland
Mr Dan Lenihan
Managing Director, Cobb Ireland
Mr Denis Lucey
Director, IAWS Group
Ms Katherine O’Leary
Dairy Farmer and Part-Time Home Economics Teacher
Mr Pat O’Rourke
Appointed 15 September 2004:
Ms Katherine O’Leary
Term Expired 15 November 2004:
Mr Philip Lynch
(re-appointed 30 November 2004)
**Aidan Cotter appointed Chief Executive 13 July
2004, succeeding Michael Duffy who resigned 7
May 2004.
Changes during 2005
Term of office expired 25 January, 2005
Mr Philip Lynch
Mr Michael Dowling
Mr Denis Lucey
Mr Joseph O’Sullivan
Mr Joseph O’Sullivan
Appointed Chairman 2 February 2005:
Ms Angela Kennedy*
Ms Gina Quin
Mr Ray Carolan
Ms Bríd Rodgers
Mr Joe Hyland
President, Irish Creamery Milk Suppliers’ Association (ICMSA)
Chief Executive, Drinagh Co-Operative Society Ltd.
Co-Founder, Megazyme International
Chief Executive, Dublin Chamber of Commerce
Pig Breeder
Former Minister for Agriculture, Northern Ireland
Chief Executive
Mr Aidan Cotter**
Secretary/Director
Mr Seamus Kenny
Managing Director, Irish Country Meats
Mr John Malone
ex-Secretary General, Department of Agriculture & Food
52
Consumer Foods Board
Membership at 31 December 2004
Changes during 2004
Chairman*
Term Expired 16 May 2004:
Mr Tom Harrington
(re-appointed 23 June, 2004)
Mr Michael Dowling
Company Director, Visiting Professor UCC and
Head of Agri Strategy, AIB
Members
Term Expired 29 July 2004:
Ms Darina Allen
Mr John Barry
Ballymaloe Cookery School
Mr Tom Corcoran
Ex-UDV Operations Ireland
Company Director
Chairman, Glanbia Plc.
Ms Dorothy Gallagher
Vice-Chairman, Consumers’ Association of Ireland
Ms Eilis Gough
Managing Director, Mileeven Fine Foods
Mr Tom Harrington
Mr Pat Given
Ms Maura O’Donovan
Poultry Instructress
Appointed 29 September 2004:
Mr John Barry
Mr Tom Corcoran
Public Representative
Changes during 2005
Food & Nutrition Consultant
Term of office expired 25 January 2005:
Mr Michael Dowling
Ms Paula Mee
Mr Larry Murrin
Managing Director, Dawn Farm Foods
Mr Joe O’Flynn
Marketing Development Director, The Irish Dairy Board
Fr Nicholas Rashford
St Joseph’s University, Philadelphia
Mr Paddy Walsh
Director, Walsh Family Foods
Appointed Chairman 21 March, 2005:
Mr John Malone*
ex-Secretary General, Department of Agriculture
& Food
Appointed 15 June 2005:
Mr Mike Doyle
General Manager, Kerry Foods
Mr Peter O’Connell
International Sales & Marketing Director, Irish Distillers
53
Annual Report and Accounts 2004
Meat & Livestock Board
Membership at 31 December 2004
Changes during 2004
Chairman*
Mr Dan Lenihan
Resigned 18 May 2004:
Mr Derek Deane
Managing Director, Cobb Ireland
Irish Farmers’ Association (IFA)
Members
Appointed 19 May 2004:
Mr John Bryan
Mr John Bryan
Chairman, National Livestock Committee, IFA
Mr Sean Buckley
Associated Craft Butchers of Ireland
Mr Paul Clarke
National Executive of the Livestock Trade
Mr Laurence Fallon
Chairman, National Sheep Committee, IFA
Mr Alan Graham
IFA Poultry Committee
Mr John Horgan
Managing Director, Kepak Group
Mr John Madden
Chief Executive, Glanbia Meats
Mr Michael O’Connor
Cappoquin Chickens
Mr Pat O’Keeffe
Chairman, National Pigs Committee, IFA
Mr John O’Leary
Irish Creamery Milk Suppliers’ Association (ICMSA)
Term Expired 29 July 2004:
Mr Michael Behan
Managing Director, Fair Oak Foods
Term Expired 12 August 2004:
Mr Paul Clarke
(re-appointed 26 October 2004)
Appointed 28 September 2004:
Mr Dan Lenihan
Appointed 26 October 2004:
Mr Michael O’Connor
Term Expired 10 December 2004:
Ms Brid O’Connor
Assistant Director, Office of the Director of Consumer Affairs
*on the formation of the Horticulture Board
Mr Dan Lenihan succeeded Mr Denis Lucey as
Chairman of the Meat & Livestock Board, and Mr.
Lucey became Chairman of the Horticulture Board.
Changes during 2005:
Appointed 28 February 2005:
Mr Gerry Maguire,
Managing Director, Slaney Foods Group
Re-Appointed 28 February 2005:
Ms Bríd O’Connor
54
Quality Assurance Board
Membership at 31 December 2004
Changes during 2004
Chairman*
Term Expired 28 January 2004:
Mr Jim O’Grady
Mr Joseph O’Sullivan
Chief Executive, Drinagh Co-Operative Society
Members
Professor Joe Buckley
Dept. of Food Science & Technology, UCC
Mr Philip Carroll
Department of Agriculture & Food
Mr John Cunningham
Ex-Dairygold Food Products
Mr Derek Deane
Consultant
Term Expired 7 July 2004:
Professor Joe Buckley
Mr Dermott Jewell
Mr Paul Nolan
(re-appointed 8 July 2004)
Resigned 19 October 2004:
Mr Bert O’Reilly
Department of Agriculture & Food
Irish Farmers’ Association (IFA)
Appointed 25 November 2004:
Mr Philip Carroll
Chief Executive, Consumers’ Association of Ireland
Changes during 2005
General Manager, Dawn Meats (Grannagh) Ltd.
Term of office expired 25 January 2005:
Mr Joseph O’Sullivan
Mr Dermott Jewell
Mr Paul Nolan
Mr Eamonn Quinn
Deputy Chairman, Superquinn
Ms Brid O’Connor
Assistant Director, Office of the Director of Consumer Affairs
Mr Pat O’Rourke
President, Irish Creamery Milk Suppliers’ Association (ICMSA)
Appointed Chairman 21 March 2005:
Bríd Rodgers*
Resigned 27 April 2005:
Mr Philip Carroll
Mr Aidan Ryan
Department of Agriculture & Food
Mr Brendan Smyth
Term of Office Expired 16 May 2005
Mr Brendan Smyth
(re-appointed 30 May 2005)
Mushroom Grower
Chief Adviser, Glanbia
Appointed 30 May 2005
Mr Luke Mulligan
Department of Agriculture & Food
(re-appointed 8 July 2005)
55
Term of Office Expired 18 July 2005
Ms Brid O’Connor
(re-appointed 19 July, 2005)
Annual Report and Accounts 2004
Horticulture Board
Membership at 31 December 2004
Changes during 2005
Chairman
Mr Denis Lucey
Term of office expired 25 January 2005:
Mr Denis Lucey
Members
Appointed Chairman 21 March 2005
Mr Kieran Dunne*
Director, IAWS Group
Ms Angela Binchy
Landscape Design
Ms Rachel Doyle
The Horticulture Board was formed
on 28 September 2004
Arboretum Garden Centre, Carlow
Ms Olive Harrington
Assistant Parks Superintendent, Belvedere House, Mullingar
Mr John Hogan
Dublin/Meath 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
Mr Maurice Whelton
Potato Grower
Ms Celestine Ward
Ballinasloe Garden Centre
56
Annual Report and Accounts 2004
Organisation Structure
Bord Bia is comprised of the Board, four Subsidiary
Boards, the Chief Executive and the Executive,
which provide the range of operational and
corporate services required to implement Board
policy and programmes.
Quality Assurance and Horticulture*) comprised
of a Chairman and 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 of
Agriculture and Food. There are four Subsidiary
Boards (Meat & Livestock, Consumer Foods,
The following Board Committees are in place: Audit
Committee, Renumeration & Pensions Comittee and
Strategy Comittee. The Executive is comprised of
staff based in the Board's head office and overseas.
Board
Committees
Board
Quality Assurance
Board
Meat & Livestock
Board
Consumer Foods
Board
Horticulture
Board
Chief Executive
Administration
Operations
Directorate
* The Horticulture Board was established on 28 September, 2004
Client Services
Directorate
Consumer Foods,
Marketing &
Communications
58
Staff Structure
Russia
A. Barinova
Director
International Markets
P. Moore
Director Horticulture
and Quality Assurance
M. Maloney
Director
Home Markets
O. Brooks
Director
Operations
Vacant
Manager Meat
G. Brickley
Manager
North America
J. O'Donnell
European Markets
Manager
Information Services
J. Smith
Chief Executive
Aidan Cotter
Director
Client Services
M. Kennedy
Secretary/Director
S. Kenny
Financial Controller
G. Bailey
59
Manager Quality
J. Keane
Director Consumer
Foods & Marketing
Vacant
Middle East,
Africa & Asia
Vacant
Amsterdam Office
S. Moe
Madrid Office
C. Ruiz
Frankfurt Office
M. O'Donnell
Manager
Marketing Finance
J. Bracken
London Office
M. Murphy
Manager Promotions
& Exhibitions
L. Williams
Milan Office
P. McSweeney
Small Business
M. Kennedy
CEEC Markets
M. Kennedy
Manager Consumer
Foods & Ingredients
T. McCarthy
Manager
International Media
M. Bracken
Paris Office
J. O'Toole
Annual Report and Accounts 2004
Report of the Comptroller
& Auditor General
I have audited the financial statements on pages
64 to 80 under Section 21 of An Bord Bia Act, 1994.
Respective Responsibilities of the
Members of the Board and the
Comptroller and Auditor General
The accounting responsibilities of the Members of
the Board are set out in the Corporate Statement
on pages 48 t0 51. It is my responsibility, based on
my audit, to form an independent opinion on the
financial statements presented to me and to report
on them.
I review whether the statement on the system
of internal financial control on pages 50-51
reflects the Board’s compliance with applicable
guidance on corporate governance 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.
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 auditing
standards 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
in the financial statements. It also includes an
assessment of the significant estimates and
judgments made in the preparation of the financial
statements, and of whether the accounting policies
are appropriate to the circumstances of An Bord
Bia, consistently applied and adequately disclosed.
I planned and performed my audit so as to obtain
all the information and explanations that I
considered necessary 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, proper books of account have been
kept by An Bord Bia and the financial statements,
which are in agreement with them, give a true and
fair view of the state of affairs of An Bord Bia at 31
December 2004 and of its income and expenditure
and cash flow for the year then ended.
John Purcell
Comptroller and Auditor General
29 June 2005
62
Annual Report and Accounts 2004
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.
and the EU Quality Beef Promotion Fund
is released to revenue in line with related
expenditure and any unexpended balance is
included in Creditors.
(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:
Financial Reporting Standards recommended
by the accountancy bodies are adopted as
they become operative. The unit of currency
is the Euro.
(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.
Leasehold improvements
Furniture & fittings
Office equipment
Computer equipment
Motor vehicles
(e) Marketing Finance:
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.
(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 Programme
10%, 6.67%
12.5%, 10%
10%, 20% and 25%
33 1/3%
20%
(f)
Superannuation:
There are two Superannuation Schemes in
operation within Bord Bia.
64
In respect of the Bord Bia main scheme,
superannuation costs are funded over the
employee’s period of service by way of
contributions to a fund managed by trustees.
The Board’s annual contributions are based
on actuarial advice and are charged to the
income and expenditure account in the period
to which they relate.
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
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.
The disclosures required under the transitional
arrangements of Financial Reporting Standard
17 “Retirement Benefits” for the year ended 31
December 2004 are shown in Note 16.
(g) Leased Assets:
65
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 depreciation
and the capital element of future rentals
is treated as a liability. The income element
is charged to the Income and Expenditure
Account over the period of the lease in
proportion to the balance of the capital
repayments.
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.
Annual Report and Accounts 2004
(i)
Stocks:
Stocks of stationery are stated at cost.
( 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.
(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.
66
Income and Expenditure Account
year ended 31 December 2004
Income
2004
2003
Notes
€’000
€’000
2a
17,067
17,003
79
-
-
(3)
Oireachtas Grant-in-Aid
EU Mushroom Programme
EU Quality Beef Promotion Fund
Statutory Levy
2b
5,159
5,588
Project and Other Income
2c
2,500
2,404
24,805
24,992
220
263
25,025
25,255
Transfer from Capital Account
3
Total Income
Expenditure
Marketing and Promotional Expenditure
4
14,940
13,854
Marketing Finance
5
350
973
Operating Expenditure
6
11,272
10,260
26,562
25,087
(266)
168
Total Expenditure
(Deficit)/Surplus for Year:
On continuing operations
On operations acquired from Bord Glas
1
Total (Deficit)/Surplus for year
Balance at 1 January
Balance acquired from Bord Glas at 1 July
1
Balance at 31 December
(1,271)
-
(1,537)
168
237
69
1,397
-
97
237
The Board has no gains or losses in the financial year or the preceding financial year other than those
dealt with in the Income and Expenditure Account.
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.
67
Angela Kennedy
Chairman
Aidan Cotter
Chief Executive
Annual Report and Accounts 2004
Balance Sheet
as at 31 December 2004
Notes
2004
2003
€’000
€’000
Assets Employed
Fixed Assets
Tangible Assets
7
1,338
1,324
Financial Assets
8
8
8
1,346
1,332
9
8
1,667
1,474
1,828
672
3,504
2,154
3,415
1,925
89
229
1,435
1,561
1,338
1,324
97
237
1,435
1,561
Current Assets
Stocks
Debtors
9
Cash at bank and in hand
Creditors
(amounts falling due within one year)
10
Net Current Assets
Total Assets less Current Liabilities
Financed by
Capital and reserves
Capital account
3
Income and expenditure account
The Statement of Accounting Policies and Notes 1 to 18 form part of these financial statements.
Angela Kennedy
Chairman
Aidan Cotter
Chief Executive
68
Cash Flow Statement
year ended 31 December 2004
2004
2003
€’000
€’000
(1,537)
168
Net Interest receivable
(48)
(54)
Depreciation
346
377
(220)
(263)
6
3
(125)
713
(1)
1
241
(634)
(Decrease)/Increase in taxation and PRSI
(149)
8
Increase in accrued and deferred income
1,248
35
Net cash (outflow)/inflow from operating activities
(239)
354
(239)
354
48
54
(191)
408
Payments to acquire tangible assets
(132)
(117)
(Decrease)/Increase in Cash
(323)
291
(323)
291
672
381
Net funds acquired from Bord Glas
1,479
-
Net funds at 31 December
1,828
672
Reconciliation of (Deficit)/Surplus to Net Cash (Outflow)/
Inflow from Operating Activities:
(Deficit)/surplus for year
Capital account transfer
Loss on Disposal of tangible fixed assets
(Increase)/Decrease in debtors
(Increase)/Decrease in stocks
Increase/(Decrease) in trade creditors
Cashflow Statement
Net cash (outflow)/inflow from operating activities
Returns on investment and servicing of finances:
Bank interest received
Net current (outflow)/inflow of funds
Capital expenditure
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in Cash
Net funds at 1 January
69
The Statement of Accounting Policies and Notes 1 to 18 form part of these financial statements.
Angela Kennedy
Chairman
Aidan Cotter
Chief Executive
Annual Report and Accounts 2004
Notes forming part of the Financial Statements
year ended 31 December 2004
1. Amalgamation with Bord Glas
Under the terms of An Bord Bia (Amendment) Act, 2004, the former Bord Glas was dissolved and its
assets and liabilities were transferred to Bord Bia on 1 July 2004. The net assets acquired from Bord
Glas were as follows:
€’000
Tangible fixed assets
234
Current assets:
Debtors and prepayments
Cash in hand
68
1,479
Current liabilities:
Creditors and accruals
(150)
Total net assets
1,631
Represented by:
Capital account
Income and expenditure account
234
1,397
1,631
The financial results for the period from 1 July to 31 December 2004 of the operations acquired
from Bord Glas were as follows:
Income
Oireachtas Grant-in-Aid
(64)
EU Mushroom Programme
79
Project and other income
113
Transfer from Capital Account
24
Total income
152
Expenditure
Marketing & Promotional Expenditure
903
Operating Expenditure
520
Total expenditure
1,423
Deficit for period
(1,271)
70
Notes forming part of the Financial Statements
year ended 31 December 2004
2. Income
(a) An amount of €2,463,000 was provided by way of Grant-in-Aid to Bord Glas in the period to 30 June 2004.
As this Grant-in-Aid was for the twelve-month period, the surplus portion of the grant was transferred to
Bord Bia on 1 July 2004.
Included in Oireachtas Grant-in-Aid is €4,707,000 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) 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.
(c) Project and other income includes industry contributions to joint promotions, trade fairs, information
services and seminar and conference fees.
3. Capital account
2004
€’000
1,324
Balance at 1 January 2004
Acquired from Bord Glas on 1 July
234
Amount capitalised in respect of purchased tangible assets
132
Net amount realised on disposal of assets
Amortisation in line with asset depreciation
(6)
(346)
14
Net transfer from Income and Expenditure Account
1,338
Balance at 31 December 2004
4. Marketing and Promotional Expenditure
71
€’000
2004
2003
€’000
€’000
Marketing Development Programmes
6,123
6,199
Trade Fairs and Exhibitions
1,367
2,116
Information Services
1,718
1,258
Quality Assurance
799
643
3,558
2,105
609
777
Communications
314
260
Nutritional Advisory Services
452
496
14,940
13,854
Trade Services
Marketing Services
Annual Report and Accounts 2004
Notes forming part of the Financial Statements
year ended 31 December 2004
5. Marketing Finance
2004
2003
€’000
€’000
Marketing Improvement Assistance Programme
196
485
Market Participation Programme
154
488
350
973
2004
2003
€’000
€’000
340
310
Staff costs
6,596
5,805
Rent, rates and insurance
1,459
1,467
Telecommunications costs
274
242
General business expenses
2,235
2,042
6. Operating expenditure
Board and Sub-Board Members’ fees and expenses
Audit fee
Depreciation (Note 7)
Loss on disposal of tangible assets
17
14
345
377
6
3
11,272
10,260
5,513
4,667
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
434
375
6,596
5,805
649
763
The total number of employees (including part-time persons) at 31
December 2004 was 89 (2003: 79). The cost of certain part-time employees
is included in Marketing and Promotional Expenditure.
72
Notes forming part of the Financial Statements
year ended 31 December 2004
7. Tangible Fixed Assets
Leashold
Property &
Furniture
Improvements and fittings
€’000
€’000
Computer
Equipment
€’000
Office
Equipment
€’000
Motor
vehicles
€’000
Total
€’000
96
3,650
Cost
At 1 January 2004
1,696
724
553
581
Additions in year
46
9
57
20
132
Acquired from Bord Glas
143
181
245
569
Disposals
(15)
(3)
(12)
(30)
1,870
911
610
834
96
4,321
At 1 January 2004
782
571
465
463
45
2,326
Charged in year
178
31
65
54
18
346
Acquired from Bord Glas
30
79
226
335
Disposals
(10)
(3)
(11)
(24)
At 31 December 2004
980
678
530
732
63
2,983
At 31 December 2004
890
233
80
102
33
1,338
At 31 December 2003
914
153
88
118
51
1,324
At 31 December 2004
Depreciation
Net Book Amounts
8. 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.
73
Annual Report and Accounts 2004
Notes forming part of the Financial Statements
year ended 31 December 2004
9. Debtors
2004
2003
€’000
€’000
1,090
1,113
577
361
1,667
1,474
2004
2003
€’000
€’000
283
44
-
149
3,132
1,732
3,415
1,925
2004
2003
€’000
€’000
Income Tax
-
111
P.R.S.I.
-
38
-
149
Amounts falling due within one year:
Debtors
Prepayments and accrued income
10. Creditors
(amounts falling due within one year)
Trade creditors
Taxation and social welfare (Note 11)
Accruals and deferred income
11. Taxation and Social Welfare
Taxation and social welfare creditors comprise the following:
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 2004.
74
Notes forming part of the Financial Statements
year ended 31 December 2004
12. Provisions for Liabilities and Charges
Value Added Tax
Premises Dilapidations Provision
At 1 January
2004
Provided
during year
At 31 December
2004
€’000
€’000
€’000
400
100
500
-
350
350
These provisions are included within Creditors.
13. 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 €1,122,677 made up as follows:
Payable on leases on which the commitment expires:
€’000
Within one year
667
Within two to five years
198
Six years and over
258
1,123
75
Annual Report and Accounts 2004
Notes forming part of the Financial Statements
year ended 31 December 2004
14. Contingent liabilities
(a) Contingent liabilities exist in respect of amounts approved but unclaimed at the year end under the
terms of the Marketing Finance Programmes operated by An Bord Bia as follows:
Marketing Improvement Assistance Programme
2004
2003
€’000
€’000
176
250
166
Market Participation Programme
193
342
443
(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.
15. Recoverable Incentives
Under the terms of the Targeted Marketing Consultancy (TMC) Programme, a total of €2,911 was due to be
recovered in 2005 and subsequent years from participating companies:
Estimated amount recoverable at end of year
2004
2003
€’000
€’000
3
3
Recoverable incentives are accounted for on a cash receipts basis and accordingly are not included in debtors.
76
Notes forming part of the Financial Statements
year ended 31 December 2004
16. Superannuation
(i)
Bord Bia Main Scheme
The Board operates a defined benefits superannuation scheme for certain eligible employees, 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 paid into a fund managed by the trustees and the
total funding rate is in accordance with actuarial recommendations.
For accounting periods commencing on or after 1 January 2005, Financial Reporting Standard 17
will require financial statements to reflect at fair value the assets and liabilities arising from an
employer’s superannuation obligations and any related funding and to recognise the costs of providing
superannuation benefits in the accounting periods in which they are earned by employees.
As a transitional measure, the Standard requires that
- for accounting periods ending on or after 21 June 2001, that the present value of scheme liabilities
and
- for accounting periods ending on or after 21 June 2002, that the components of the defined benefit
cost and the amounts recognised in the Statement of Recognised Gains and Losses be disclosed in a
note to the financial statements.
An actuarial valuation of An Bord Bia Superannuation Fund was carried out as at 31 December 2004 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:
31/12/2004
31/12/2003
Projected Unit
Projected Unit
Discount Rate
4.75%
5.50%
Inflation Rate
2.25%
2.25%
Salary increases
4.50%
4.50%
Pension increases
4.00%
4.00%
Return on assets
6.20%
7.03%
Valuation Method
77
Annual Report and Accounts 2004
Notes forming part of the Financial Statements
year ended 31 December 2004
16. Superannuation (continued)
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-04
Equities
Bonds
Property
7.00%
4.00%
6.00%
Cash
Total market value of superannuation fund assets
Contributions due to be paid
Present value of funded pension liabilities
Net deficit in pension scheme
2.25%
Long-term
rate of
Value at
31-Dec
return
2004 expected at
31-Dec-03
€’000
8,419
1,636
549
774
Value at
31-Dec
2003
€’000
7.75%
7,029
4.75%
1,726
6.75%
503
3.00%
228
11,378
9,486
-
16
(16,510)
(13,246)
(5,132)
(3,744)
Had FRS17 been reflected in the primary financial statements, the following are the amounts that would
have been included in the Income and Expenditure Account and the Statement of Total Recognised Gains
and Losses:
Year ended
Included in payroll costs:
Current service costs
Past service costs
Irrecoverable surplus recognised against past service costs
Year ended
31/12/2004
31/12/2003
€’000
€’000
689
551
-
-
-
Settlements and curtailments
-
-
Irrecoverable surplus recognised against settlements and
curtailments
-
-
689
551
752
711
(695)
(528)
57
183
Net operating profit charge
Included in finance costs:
Interest cost
Expected return on assets
Net finance costs
78
Notes forming part of the Financial Statements
year ended 31 December 2004
16. Superannuation (Continued)
Year ended
Year ended
31/12/2004
31/12/2003
€’000
€’000
(402)
(632)
Included in statement of total recognised gains and losses:
Difference between expected and actual return on assets (gain)/loss
Experience (gains)/losses on fund liabilities
(346)
(717)
Effect of changes in actuarial assumptions - (gain)/loss
1,990
-
Net in statement of total recognised (gains)/losses
1,242
(1,349)
(3,744)
(4,875)
{Note: Positive figures represent a charge to the corresponding account}
Movement in deficit during the year:
Deficit in Fund at beginning of year
Service cost
Contributions
Other finance income/(charge)
Actuarial gain/(loss)
Deficit in Fund at end of year
(689)
600
(551)
516
(57)
(183)
(5,132)
(3,744)
(1,242)
1,349
History of actuarial gains and losses
Difference between expected and actual return on assets
Expressed as a percentage of fund assets
Experience (gains)/losses on fund liabilities
Expressed as a percentage of fund liabilities
Total actuarial (gains)/losses
Expressed as a percentage of fund liabilities
(402)
(3.5%)
(346)
(632)
(6.7%)
(717)
(2.1%)
(5.4%)
1,242
(1,349)
(7.5%)
(10.2%)
In the period subsequent to the year-end, the Department of Agriculture and Food commenced
discussions with the Department of Finance with a view to consideration of the option of transferring
the operation of the Bord Bia Superannuation Schemes and Fund to the Exchequer.
79
(ii) Former Bord Glas Scheme:
As detailed in Accounting Policy (F)(page 64/65), the superannuation arrangements of former Bord Glas
staff are operated on an administrative basis. Based on a valuation carried out for FRS17 purposes as at
31 December 2004, taking account of salary and membership information as at that date, the value of
the accrued liabilities was €1,971,000. The service cost for the 6 month period to 31 December 2004 was
€25,000. The assumptions made by the actuary were identical to the assumptions made in the case of
the Bord Bia main scheme.
Annual Report and Accounts 2004
Notes forming part of the Financial Statements
year ended 31 December 2004
17. 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.
18. Approval of Financial Statements
The financial statements were approved by the Board on 15 June 2005.
80
Marketing Finance Grant Payments 2004
Company
Prog.
Paid
Company
Prog.
Paid
4e Fulfilment.com Ltd
MPP*
1,000
Couverture Ltd
MPP
6,500
Aine’s Chocolates Ltd
MPP
5,024
CPAC Ltd
MPP
4,000
MIAP**
3,077
Creative Sauces Ltd
MPP
5,000
Ardrahan Dairy Products Ltd
MIAP
5,467
Crozier Dairy Prodcuts Ltd
MIAP
5,158
Baking Emporium Ltd
MPP
500
Cybercolors Ltd
MIAP
3,500
Ballycotton Seafoods Ltd
MIAP
425
Dansko Foods Ltd
MIAP
3,200
Blenders Ltd
MPP
2,900
Derryvilla Farm
MIAP
5,000
Brids Brown Bread
MPP
468
Druid Chocolates Ltd
MPP
4,352
Carrigaline Farmhouse Cheese
MIAP
2,118
Durrus Farmhouse Cheese Ltd
MIAP
4,300
Carrigbyrne Farmhouse Cheese Ltd
MIAP
1,906
Edward Flahavan & Sons Ltd
MIAP
3,500
Castle Leslie Gifts & Goodies
MPP
4,500
Fermoy Natural Cheese Com.
MPP
1,366
Celtbury Ltd
MIAP
3,400
Flair Confectionery
MPP
1,000
Celtic Chocolates Ltd
MPP
2,500
Fruitfield Foods Ltd
MIAP
3,500
Chand Foods Ltd
MPP
1,000
Gallaghers Bakery Ltd
MPP
2,000
Chivers Ireland Ltd
MIAP
3,000
Gallaghers Irish Chocolates Ltd
MPP
3,990
Chocaid.Com Ltd
MPP
873
Gallweys of Waterford Ltd
MPP
1,511
Cisti Gugan Barra Teo
MPP
8,000
Galmere Fresh Foods Ltd
MIAP
2,000
Clonakilty Food Company Ltd
MIAP
1,500
Garryvoe Foods Ltd
MPP
4,460
Cocoa Bean Handmade Chocolates
MPP
750
Glenhaven Foods (Arklow) Ltd
MIAP
3,200
Compsey Creamery Ltd
MIAP
3,500
Glyde Farm Produce
MIAP
1,270
Cooleeney Farmhouse Cheese
MIAP
6,516
Green Pastures (Donegal) Ltd
MIAP
3,500
Cooley Distillery Ltd
MPP
3,200
Greenacres Foods Irl Ltd
MIAP
1,278
Coolmore Fresh Foods Ltd
MPP
3,000
Gubbeen Farmhouse Products Ltd
MIAP
4,384
Corleggy Cheese
MIAP
725
Harney Enterprises Ltd
MPP
1,341
Country Cooking Company Ltd
MIAP
9,000
Healy Fine Foods Ltd
MPP
1,000
Country Crest Ltd
MIAP
3,200
Heatherfield Ltd
MPP
2,720
Allin All Ingredients Ltd
81
* MPP - Market Participation Programme
** Marketing Improvement Assistance Programme
Annual Report and Accounts 2004
Company
Prog.
Paid
4,000
Natures Best Ltd
MIAP
3,500
MIAP
8,000
Noodle House Organic Pasta
MPP
2,606
Hot Irishman Ltd
MPP
3,350
Nore Ingredients Ltd
MIAP
3,000
Hyde Ltd
MPP
20,000
Olvi Oils Ltd
MPP
901
Inagh Farmhouse Cheese Ltd
MIAP
10,338
Paganini Ltd
MPP
5,000
Ina’s Kitchen Desserts Ltd
MPP
2,720
Port Yarrock Smokery
MIAP
689
Ingredients Solutions Ltd
MIAP
3,200
Protocol Food Ingredients
MIAP
2,733
Irish Flapjack and Muffin Company
MPP
3,387
Quality First Ltd
MIAP
3,000
Irish Yogurts Ltd
MIAP
3,600
Radical Fruit Company Ltd
MIAP
6,000
Itsa Bagel Ltd
MPP
762
Shannon Minerals Ltd
MPP
3,000
J&L Grubb Ltd
MIAP
7,382
Sheridans Cheesemongers Ltd
MIAP
2,841
James Daly & Sons Ltd
MIAP
3,000
Silverpail Dairy Ireland Ltd
MPP
3,400
Kilfera Food Manufacturers Ltd
MIAP
1,767
Stable Diet Ltd
MPP
4,710
Krawczyk’s West Cork Salami
MIAP
2,000
Sunnyside Fruit Farm Ltd
MIAP
2,000
Laragh Stuart Foods Ltd
MIAP
5,953
Sunshine Juice Ltd
MIAP
3,846
Lily’s Ltd
MPP
3,000
Susi Foods
MIAP
1,294
Lir Chocolates Ltd
MPP
3,000
Swift Fine Foods Ltd
MIAP
3,200
Lundy Foods Ltd
MIAP
10,175
Swissco Ltd
MIAP
3,200
M.A.P.P Foods Ltd
MIAP
1,945
The Irish Chocolate Company Ltd
MPP
3,000
Mileeven Ltd
MIAP
1,707
The Porterhouse
MPP
3,000
Milleens Cheese Ltd
MIAP
1,588
The Scullery Fine Foods Specialists Ltd
MPP
2,500
Milne Foods Ltd
MIAP
1,744
Tipperary Organic Ice Cream Ltd
MPP
8,000
Mount Callan Farmhouse Cheese
MIAP
1,976
Twine Inc and Organic Herb Comp.
MPP
3,619
My Own Food Products Ltd
MPP
2,746
N.S.S Ltd
MIAP
2,536
Natural Ireland Ltd
MIAP
4,500
Company
Prog.
Paid
Heron Quality Foods Ltd
MPP
Horgans Delicatessens Supplies Ltd
Total
€349,992
82
Notes
83
Office Network
Dublin (Head Office)
Clanwilliam Court,
Lower Mount Street,
Dublin 2,
Ireland
Tel: 00 353 1 668-5155
Fax: 00 353 1 668-7521
E-mail: info@bordbia.ie
Amsterdam
Strawinskylaan 861,
1077 XX Amsterdam,
the Netherlands
Tel: 00 31 20 575 3484
Fax: 00 31 20 575 3485
Chicago
Consulate General of Ireland,
400 North Michigan Avenue,
Suite 911, Chicago, Illinois 60611
USA
Tel: 00 1 312 751 2246
Fax: 00 1 312 751 2480
Frankfurt-am-Main
Wöhlerstraße 3-5,
60323 Frankfurt am Main,
Germany
Tel: 00 49 (0)69 710 423-255
Fax :00 49 (0)69 710 423-409
London
2 Tavistock Place,
London, WC1H 9RA, England.
Tel: 00 44 20 7833 1251
Fax: 00 44 20 7278 7193
Madrid
Bord Bia - Alimentos de Irlanda
Casa de Irlanda,
Paseo de la Castellana, 46 - planta 3,
28046 Madrid, Spain
Tel: 00 34 91 435 65 72
Fax: 00 34 91 435 62 11
Moscow
Orlikov per,3B
Moscow 107804, Russia
Tel: 00 7 095 207 8150
Fax: 00 7 095 207 8460
Milan
Via S.Maria Segreta 6
20123 Milano, Italy
Tel: 00 39 02 72 00 20 65
Fax: 00 39 02 72 00 40 62
Paris
Maison d’Irlande,
33, rue de Miromesnil,
75008 Paris, France.
Tel: 00 33 1 42 66 22 93
Fax: 00 33 1 42 66 22 88
www.bordbia.ie
Funded by the Irish Government under the
National Development Plan, 2000- 2006