1
Export Figures
3
Chairman’s Statement
7
Chief Executive’s Review
30
Corporate Statement
35
Board Membership
39
Organisation Structure
41
Report of the Comptroller and Auditor General
42
Statement of Accounting Policies
44
Income and Expenditure Account
45
Balance Sheet
46
Cashflow Statement
47
Notes Forming part of the Financial Statements
56
Marketing Finance Grant Payments 2003
Contents
Presentation to the Minister for Agricuture and Food
In accordance with Section 22 of An Bord Bia Act 1994, the Board is pleased to submit to the
Minister its Annual Report and Accounts for the 12-month period ended 31 December 2003.
Philip Lynch
Chairman
Annual Report and Financial Statements 2003
www.bordbia.ie
Exports
2003
Irish Food & Drink Exports (€m)
2003(e)
Fish
Live Animals
2002(p)
350
380
140
105
180
170
Poultry
180
186
Ed. Horticulture
Sheepmeat
145
165
250
Pigmeat
270
1,020
Beverages
948
Beef
1,280
1,190
Prepared Foods
1,520
1,598
Dairy & Ingredients
1,600
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Exports by Sector (Value in €m)
2002(p)
€m
2003(e)
€m
% Change 2003
%
Fish
380
350
-8%
Live Animals
105
140
+33%
Poultry
170
180
+6%
Edible Horticulture & Cereals
186
180
-3%
Sheepmeat
165
145
-12%
Pigmeat
270
250
-7%
Beverages
948
1,020
+8%
Beef (1)
1,190
1,280
+8%
Prepared Foods
1,598
1,520
-5%
Dairy Products & Ingredients (1)
1,527
1,600
+5%
Total value of Irish food and drink exports
6,539
6,665
+2%
Annual Report and Financial Statements 2003
1,527
(1) Including refunds
Source: Figures are Bord Bia estimates based on CSO provisional figures
1
Given the changes facing rural Ireland, it is vital
for the well-being of the rural economy that the
agri-food and drink industry is nurtured & developed.
Chairman’s
Statement
I am pleased to report
marketplace is one of the most demanding it has faced.
that given the prevailing
Success will determine the nature and future scale of
marketplace conditions,
Irish agriculture and the Irish food industry. In May 2004,
the Irish food and drink
ten new countries will join the European Union.
industry turned in a
This major development will pose both challenges
robust performance
and opportunities. Bord Bia’s strategy for these markets
in 2003.
is to increase awareness of Irish food and drink products
at trade level initially through targeted research, market
Adverse exchange rate
movements during the year coupled with intense price
and product competition in all main export markets
visits and buyer introductions. In the early stages of
export development opportunities are envisaged in
the beef, dairy and drinks sectors.
tested the inventiveness and resilience of the industry.
The value of a diversified industry was shown once more
Looking forward to a post CAP review environment,
with gains in a number of sectors offsetting difficulties
cost competitiveness will continue to be an imperative.
experienced in others.
The majority of companies are facing up to this changed
truly indigenous sectors of the Irish economy. It has low
import content, very high value added and low levels of
profit repatriation.
competitive. This must be matched by investment in the
marketplace. A clear understanding of consumer needs
and the drive towards convenience, product innovation
and effective marketing are, together, the elements,
It is the only indigenous industry that has managed to
which will support market penetration for Irish exporters
create sufficient scale and expertise to compete on the
in the future.
world stage and it accounts for over 55% of exports by
Irish owned companies. Given the changes facing rural
Ireland, it is vital for the well-being of the rural economy
that the agri-food and drink industry is nurtured and
At a global level the food and drink industry is going
through a process of significant change that is presenting
challenges and opportunities to all involved from the
producer to the retailer.
developed. Whilst it is a very important sector in the
overall Irish economic context, it still faces many of the
There are many different forces driving these changes,
same threats as other Irish industries, including increased
but the key ones revolve around changing consumer
foreign competition from low cost producers, a loss of
behaviour with an emphasis on convenience foods,
domestic cost competitiveness, a serious exchange rate
functional food and speciality products. This in turn,
risk and a need to move up the value chain. If the
is driven by factors such as lifestyle, demographics and
industry is to maintain its position as a key indigenous
global retail trends. Success will depend on our ability
driver of the Irish economy, it will have to react to these
to anticipate and respond to emerging market
challenges in a very aggressive and effective manner. It will
opportunities. Bord Bia must also be in a position
also have to deal effectively with major structural changes
to respond to these challenges on behalf of its
occurring in 2004 and 2005.
stakeholders and above all it must deploy its
Annual Report and Financial Statements 2003
trading environment and are taking measures to be cost
The food and drink industry is one of the few remaining
resources effectively so as to return maximum
The latest reform of the CAP is the most fundamental
yet. Combined with the prospect of further liberalisation
of the international trading regime under WTO, it sets
the stage for a highly competitive world food market.
The challenge for the Irish food industry to compete
advantage to the stakeholders. This is the ethos
within which Bord Bia operates and to which we
are committed. Organisation and staff development
processes are geared accordingly, led by the Chief
Executive and a dedicated management team.
successfully in this more open and competitive
3
Chairman’s
Statement
I am satisfied that we have developed the strategies and
I would like to thank my Board colleagues for their
the services to meet these challenges. Bord Bia, through a
support to me personally, for their dedication and for
comprehensive range of initiatives is working closely with
the wealth of experience and skills they bring to Bord Bia.
companies in all segments of the industry to help them
achieve that vital edge which will sustain and develop
their business in the demanding markets in which they
must compete.
I thank also the members of the Subsidiary Boards
who bring further expertise to Bord Bia and who
assist the Board in the implementation of the Sectoral
Programmes. Corporate governance requirements have
As an organisation, there are two major structural
expanded considerably in the last few years and this has
changes to be addressed in 2004, namely the
brought a much expanded workload for the Board Audit
amalgamation of Bord Glas with Bord Bia and
Committee, the members of which I would like to thank
responding to the Government’s decentralisation
for their important contribution.
plan. I have no doubt that the amalgamation of
Bord Glas with Bord Bia will be beneficial and that
both organisations will make a major contribution
Annual Report and Financial Statements 2003
to a new and expanded Bord Bia. In relation to
decentralisation, we are working closely with our
parent Department regarding implementation of
this Government decision.
management and staff for their quite exceptional loyalty
and dedication and on whom the Board relies “ to
champion the success of Irish food and drink” on
a daily basis and to ensure that Bord Bia’s strategic
objectives are achieved.
I would like to take this opportunity to publicly thank
Philip Lynch
those who contribute to our success. We continue to
Chairman
benefit from the support and encouragement of the
Minister for Agriculture and Food, Mr. Joe Walsh T.D.,
and from his active participation in major marketplace
activities. I wish to thank the Minister of State, Noel
Treacy T.D., Minister of State, Liam Aylward T.D. and
Secretary General, John Malone, and the officials of the
Department of Agriculture and Food for all their support,
assistance and encouragement.
I would like to thank our stakeholder organisations
with which we have a very close and fruitful working
relationship. We also work closely with our Ambassadors
and the Irish Embassies in overseas markets who support
us and add considerable value to our activities.
4
I am proud again to pay tribute to our Chief Executive,
At a global level the food and drink industry is
going through a process of significant change
presenting challenges and opportunities
to all involved from the producer to the retailer.
In 2003 the value of Irish food and drink
exports reached an estimated value of
€6.67 billion.
Chief Executive’s
Review
In 2003 the value of
Irish food and drink
exports reached
an estimated value
of €6.67 billion.
This performance is
set against the backdrop
of weaker demand conditions, adverse currency
movements and intense price competition in all
markets.
The food and drink industry is made up
of a number of distinct and diverse sectors.
Strong performances in beef and livestock,
beverages and dairy were offset by declines in
pigmeat, lamb, prepared foods and horticulture.
In the meat sector, beef exports grew by 8%,
lamb and pigmeat exports were down 12%
and 7% respectively and live exports increased
by 33%. Dairy products and ingredient exports
grew by 5% while prepared foods declined by 5%.
However, beverages exports increased by 8%
with strong performances in key markets
including Britain and the United States.
The Irish food and drink industry has strong
linkages to the domestic economy. It is competing
in a world market that is going through a process
of considerable change at both policy and market
levels. How the industry responds to the new
challenges and opportunities is an important factor
in the overall performance of the Irish economy.
Bord Bia is the food and drink industry's trade
development, information and promotion agency. In
2003 it worked with companies on a number of
initiatives across its key service areas of information,
market development and promotion.
Highlights –
Making a Difference
• Irish beef exports in 2003 were valued
at almost €1.28bn, which represents an increase
of 8% on the previous year. A record 85% of
beef exports were within the EU. This is in line
with Bord Bia’s five-year strategy for Irish beef to
secure access to markets within Europe.
• Bord Bia, IBEC and AIB joined forces for the
first Ireland The Food Island Food & Drink Industry
Awards to reward excellence and promote best
practice in the Food and Drink industry. 196
applications were received from120 companies
across six categories.
• Bord Bia signed a two-year agreement with
Bank of Ireland Business Banking to partner
the Brand Forum until 2005. The Brand Forum
provides a centre of excellence for brand
marketing which delivers new skills to the
industry and promotes the long term success
of food and drink brands. The quarterly Brand
Fora will now be supported by two regional
events, a publication featuring all the Brand
Forum members, practical brand development
services, access to exclusive market research &
insight and food & drink brand promotion.
• Bord Bia was involved in the organisation
and co-ordination of 80 trade fairs and
events this year. Of these, 12 were trade fairs,
15 conferences/seminars, 35 inward buyer visits
(206 visitors), 12 Embassy promotions and a
number of corporate events including the
Ireland The Food Island Champion Stakes,
Anuga Reception, National Ploughing
Championships and the China Trade Mission.
Annual Report and Financial Statements 2003
Introduction
*Michael Duffy resigned on 7th May 2004 and Patrick Moore was appointed Interim Chief Executive.
The Annual Report had been submitted to the Minister in March 2004 as required by An Bord Bia Act
1994 and the Accounts were signed in June 2004 by the Chairman and the Interim Chief Executive,
following Board approval.
7
Chief Executive’s
Annual Report and Financial Statements 2003
Review
8
• Following a major drive to extend Féile Bia
membership numbers during the year, the total
membership at the end of 2003 climbed to
1,290 outlets. This includes new members
from the restaurant, pub and in-house catering
companies. Products covered under the
programme are beef, lamb, pigmeat, chicken
and eggs.
• Bord Bia and the Western Development
Commission in association with the
Department of Agriculture and Food
organised the first National Organics
Conference in Co. Galway. Themed The
Irish Organic Industry, Present Challenges
and Future Prospects, the event was attended
by over 200 organic producers, processors,
retailers and representatives of organic bodies
and State agencies.
• As part of its promotional strategy for Irish
beef in the Italian market, Bord Bia launched
a major consumer campaign. The campaign
was designed to raise awareness and
promote sales with existing Italian customers.
Research demonstrated that Irish beef had
the right appearance and was the preferred
choice on taste. Exports of prime Irish beef
to Italy grew by a significant 75% to a new
high of 35,000 tonnes.
• Bord Bia facilitated the establishment and
operation of the TASTE Council. The purpose is
to encourage the strategic development of the
speciality food sector.
• The Bord Bia Extranet was launched mid-year
to provide electronic access to Bord Bia
material that is largely available in printed form
as well. Client companies can now access
material around the clock, seven days a week.
Bord Bia received a total of 4,560 enquiries
along with almost 100,000 hits to its website
in 2003.
• Bord Bia supported the development of
Farmers’ Markets with the launch of a webbased advice and assistance programme for
companies looking to establish a Farmers’
Market for their produce. All Farmers’ Markets,
are listed on the website which is accessible by
consumers. Bord Bia also sponsored the
Farmers’ Market at Farmleigh in September
in co-operation with the OPW.
• The Beef Quality Assurance Scheme has been
revised to bring it in line with the benchmark
standard EN45011. Quality Assurance is a
market necessity and the EN45011 beef
scheme will facilitate the continued
competitiveness of the beef sector.
Chief Executive’s
Review
A Chicken Quality Assurance Scheme
was also developed.
• Representatives from more than one hundred
of Ireland’s food, drink and ingredients
manufacturing companies attended Bord Bia’s
Consumer Foods and Drink Industry Day.
Themed Paths to Growth, the conference
provided market information and insight on
retailer and foodservice trends in Ireland, the
U.K. and continental Europe. Staff from Bord
Bia’s overseas offices held a total of 150
meetings with companies over the two
days to discuss export sales opportunities.
• One hundred and thirty nine companies applied
for funds under Bord Bia’s marketing finance
schemes. Eighty-five companies received grants
to the value of Ä973,000.
• A tailored working strategy with the key
industry players on the U.K. mushroom market
was enhanced by the development of a newly
formed Task Force on the Mushroom Industry.
This Task Force was set up by Minister Noel
Treacy to examine the critical issues facing the
sector and to draw up a co-ordinated action
plan to ensure the future of the industry.
• Thirty companies participated on the UK food
service programme. Activities in the foodservice
sector in the U.K. included original consumer
research, 66 buyer meetings, 5 buyer contact
events, 12 newsletters, 4 workshops and 7
bespoke projects.
• A marketing campaign to promote Irish beef to
the premium retail segment in France covering
three targeted regions, involved store managers
and head butchers from over 1,400
supermarkets in six retail chains.
• Bord Bia's Irish Beef Recipe Calendar promotion
in Britain featured competition details on 2.6
million individual packs of Irish beef over a fourweek period in Tesco, Sainsbury’s, Safeway,
Somerfield and Aldi stores. The recipe calendar
featured 14 Irish beef recipes including
traditional favourites and more contemporary
ones. It was delivered to over 200,000 British
homes.
Annual Report and Financial Statements 2003
• Bord Bia worked in conjunction with the
Department of Agriculture and Food on all
international market access activities. The Irish
beef trade recommenced with Egypt in the final
quarter of 2003. Beef exports to international
markets were valued at €200 million.
9
Chief Executive’s
Annual Report and Financial Statements 2003
Review
10
Meat and Livestock
Beef Exports
2003 was a challenging but successful year for the
Irish livestock and meat industry. Exports were up
5% to almost €2 billion despite declines
in both lamb and pigmeat exports. This was largely
due to the strong performance by beef and live
animal exports with Irish beef exports to
continental Europe increasing by almost 30%
to 150,000 tonnes.
Irish beef exports in 2003 were valued at €1.28
billion, which represents an increase of 8% on the
previous year. A record 85% of beef exports were
within the EU, which compares with 50% in 2000.
Irish beef exports to continental European markets
increased by almost 30% to 150,000 tonnes, due
largely to the fact that the EU market was less than
self sufficient for the first time in almost 25 years.
The principal growth was evident in Italy, France and
Holland.
Meat demand in the Irish market is estimated
to have grown by 4% in volume terms but the
value of these sales was static. Beef was
the main beneficiary with a 10% volume growth
followed by lamb at 8%. Poultry sales showed
marginal growth and pigmeat sales declined slightly.
Total Irish cattle disposals showed a rise of 8%
during 2003 to reach 2.08 million head. This reflects
an increase of almost 6% in export meat plant
disposals at 1.76 million and a jump of 50% in live
cattle exports to 220,000 head. The rise in export
meat plant supplies was largely due to an 8%
increase in male cattle disposals during the year.
The principal factors leading to the higher male
cattle availability were lower calf/weanling exports
in 2001 and specialised beef production including
young bull beef production aimed at supplying
premium customers on the continent, particularly
the Italian market.
The United Kingdom remained the most important
market for Irish beef, accounting for over half of
total exports at 265,000 tonnes. This represents
a rise of 4% on 2002 levels and was achieved
despite the euro strengthening by almost 10%
against sterling during the year. In line with Bord
Bia’s strategy for developing the market, increased
volumes were sold direct to retail outlets with an
estimated one third of total exports now sold
through this channel. Significant progress continued
to be made in penetrating the value added and
premium foodservice segments of the market. Bord
Bia activities in the U.K. in 2003 focused on building
consumer awareness of Irish beef at both retail and
foodservice level.
This approach is proving very effective as was
evidenced in the exceptional response to Bord Bia’s
‘Irish Beef Calendar’ promotion.
Chief Executive’s
Review
Irish beef to the premium retail segment in three
regions covering 1,400 supermarkets. The campaign
is a key element in a drive to double Irish beef
exports to France.
The Irish beef industry has made significant progress
in developing specialised beef production systems
that produce beef to the exact specification
required by premium customers.
Bord Bia’s promotional strategy for Irish beef in the
Italian market involved a major consumer campaign,
designed to raise awareness and promote sales
with existing Italian customers in the target areas
by capitalising on the positive response to Irish beef
from Italian consumers in research carried out
earlier in the year. The results clearly demonstrated
that Irish beef had the right appearance and was
the preferred choice on taste. These findings
provided Italian retailers with further evidence
that their customers considered Irish beef worth
the premium price.
Irish beef exports to Sweden performed strongly
during 2003 to reach an estimated 24,000 tonnes,
valued at around €40 million, representing a rise of
20% on 2002 levels and accounting for over 25% of
imports. Irish beef is well positioned in the Spanish
retail sector and is currently stocked in seven of the
top 10 retail chains.
Beef exports to International markets were
marginally lower at 85,000 tonnes and valued at
almost €200 million, reflecting an increasingly
competitive global market for beef. The substantial
appreciation of the euro against the dollar did not
help the competitiveness of Irish beef on these
markets. Trade levels were also affected by the
Annual Report and Financial Statements 2003
Exports of prime Irish beef to Italy grew by an
impressive 75% to a new high of 35,000 tonnes.
This growth was achieved while returning a
premium of between 10 and 20% to producers,
a remarkable achievement by the industry and
a testament to the value of close relationships
between producers and processors to meet
the needs of specific market segments.
The Netherlands continued to represent a priority
market for Irish steer beef with trade levels
increasing to 32,000 tonnes, reflecting a good retail
demand. The priority in the Dutch market is to
consolidate and grow the reputation of Irish beef
and ultimately generate a consumer premium.
To this end, a Meat Trade Marketing Specialist,
based in Amsterdam, was appointed by Bord Bia
during the year.
Irish beef exports to France recovered by a third
to reach 24,000 tonnes with a value of some
€65 million. The rise in trade levels reflects the
increased interest in Irish beef evident among
French beef importers during 2003. Bord Bia
launched a trade marketing campaign to promote
11
Chief Executive’s
Review
introduction of import quotas in Russia. On the
positive side, the Egyptian market re-opened for
Irish beef and the beef trade recommenced in the
last two months of 2003 when the first import
licenses were taken out.
Annual Report and Financial Statements 2003
Bord Bia worked in conjunction with the
Department of Agriculture and Food on
all market access activities. Promotional
activity included the organisation of exhibits
at important food fairs and participation in
trade promotions that supported export sales
to the major markets with particular emphasis
on markets expected to re-open.
12
Enlargement of the EU will create some
opportunities for Irish beef in CEEC markets.
Bord Bia undertook field research and study
visits in targeted markets in the region.
Opportunities with retailers in Poland, the Czech
Republic and Hungary are being actively pursued.
Another desirable trend in 2003 was the continuing
move up the value chain with opportunities
emerging for ready to cook, ready to heat and
ready to eat products.
Bord Bia undertook two US study tours
investigating retail trends, which were strongly
supported by the Irish industry. During the year,
Irish meat companies launched “heat and serve”
ranges, a category that is enjoying strong growth
in the US.
Live Animals
The value of live animal exports from Ireland
increased by 33% during 2003 to reach €140
million. This comprised a 50% increase in the
number of live cattle exports to 220,000 head and
a rise of 25% in live pig exports to 380,000 head.
Increased demand for veal calves in Holland and
a strong recovery in other markets such as Spain
and to a lesser extent Italy, gave a good boost to
live cattle exports. Growth in exports of live pigs
to Northern Ireland was helped by the reduced
slaughter capacity in Ireland and a relatively tight
supply situation in the U.K.
Bord Bia’s programme of activities in support of
the livestock trade during the year continued to
focus on keeping livestock exporters informed on
the developments taking place in terms of demand
for live animals in our key markets. Additionally,
Irish exporters were assisted in making contact
with potential customers in the marketplace.
Pork and Bacon
2003 was another very challenging year for the Irish
pigmeat sector. The difficulties emanated from the
appreciation of the euro, the release of APS stocks
and increased competition on global markets.
The net result was a decline of 6% in pig prices
across the EU. The value of Irish pigmeat exports
declined by 7% during the year to €250 million.
This fall was comprised of a decline of 4% in
export volumes and a 3% decline in pig prices.
Chief Executive’s
Review
Bord Bia disseminated information to pig producers
through participation in a number of producer
meetings and events during the year. The usage
of pork and bacon in the foodservice sector was
encouraged through a pork competition targeting
Chefs at Catex, the specialised catering exhibition
at the RDS, in association with the Irish Farmers’
Association and the Irish Association of Pigmeat
Processors. In tandem with a number of pigmeat
processing plants, a pork competition for student
chefs was launched in nine Catering Colleges
(Institutes of Technology) in November.
An industry study tour to Brazil was organised
in March to look at large scale production and
processing facilities.
Pork promotional campaigns were organised in
April, July, August and November to encourage
consumers to discover the tastiness, variety of
recipes, convenience and great value of pork as a
meal solution whether for summer barbecuing or
winter nourishment. Additionally, the sampling of
Roast Suckling Pig was a feature of the National
Ploughing Championships in Kinnegad in September.
Lamb
The value of Irish sheepmeat exports declined
by 12% in 2003 to an estimated €145 million.
This decline was comprised of an 8% fall in volume
and a 4% fall in price. The domestic market was
relatively firm during the year, but the export
markets were made more difficult as a result of
weaker demand in France, which still accounts
for over 70% of total lamb exports from Ireland.
The EU market continued to re-adjust following
the historically high prices that prevailed in 2001
and 2002. However, prices are still well ahead
of the levels that prevailed prior to the outbreak
of Foot & Mouth (FMD) disease. In Ireland for
example, prices during 2003 were still 18%
ahead of pre-FMD levels. The domestic market
now accounts for over one third of all Irish
sheepmeat output, compared to just 29% in 1995.
Domestic lamb consumption increased by 8% in
2003 to reach 21,500 tonnes.
Annual Report and Financial Statements 2003
The U.K. continued to account for around 55% of
Irish pigmeat exports at 65,000 tonnes product
weight. This represented a decline of 4% on 2002.
Continental EU markets are estimated to have
accounted for 27% of Irish exports, at 32,000
tonnes. This was equivalent to a decline of 6% on
the previous year, reflective of more competitive
market conditions. Exports to International markets
were broadly unchanged at around 21,000 tonnes.
Increased volumes to Japan and the U.S. offset
lower export volumes to other markets.
13
Chief Executive’s
Review
Exports to France fell in line with overall exports
to 31,000 tonnes. The U.K. continued to provide
a solid market for manufacturing meat. Exports
to Germany also increased, but sales to the
Mediterranean were at best maintained.
Annual Report and Financial Statements 2003
Promotional activity overseas centred on the
premium French market where the main focus
was on the continued regional development of
consumer awareness and identification of Irish lamb
in retail outlets, under the “L’Agneau de la St. Jean”
label. The emphasis in 2003 was on the Paris and
North Eastern region.
14
On the domestic market, press and PR campaigns
were undertaken in the summer and autumn to
encourage consumers to cook lamb as a tasty
and delicious option for ‘meals in minutes’.
Both campaigns were designed to broaden the
appeal of lamb particularly to younger consumers.
During September and October, a promotion was
organised in association with Féile Bia Chefs to
increase the usage of lamb in restaurants.
Poultry and Eggs
The poultry sector refers to all fresh and processed
poultry products. Irish poultry meat exports in
2003 were valued at €180 million indicating a small
growth in volume exports over the year when
compared to 2002 levels. Exports of processed
poultry meats and prepared products accounted
for nearly two thirds of the total poultry exports
during the year. The U.K. continues to be the main
market for Irish poultry exports, accounting for
approximately 80% of total sales.
Bord Bia launched a major new TV and poster
advertising campaign for eggs produced under
the Bord Bia Quality Assurance Scheme.
The campaign, themed ‘Real Good Fast Food’,
is part of a three year advertising, promotion
and PR campaign that targets 18-34 year olds
and it is designed to bring eggs firmly into the
21st century and position them as a cool
convenience food that is healthy, delicious and
highly versatile. The campaign is organised in cooperation with the Irish Egg Producers Association.
Organic Products
The concept of ‘traceability’ is becoming deeply
ingrained in the consumer psyche, following recent
real or perceived threats to the food chain. The
origin of food products is becoming increasingly
more important. Ireland, with its clean green image
and generally extensive system of farming, is well
positioned to attract large-scale commercially
minded farmers to organic production.
Organic products can command a premium price
that certain segments of the consumer market are
prepared to pay. In 2003, sales of organic products
in Ireland reached an estimated retail level of
€38 million.
A record 85% of beef exports were within the
EU, which compares with 50% in 2000.
Chief Executive’s
Review
Research undertaken by Bord Bia of Irish consumer
attitudes to organic food has delivered an extensive
profile of today’s multi-faceted organic consumer.
Annual Report and Financial Statements 2003
In October, Bord Bia and the Western
Development Commission in association
with the Department of Agriculture and Food
organised the first National Organics Conference
in Co. Galway. Themed the Irish Organic Industry,
Present Challenges and Future Prospects, the event
was attended by over 200 organic producers,
processors, retailers and representatives of organic
bodies and State agencies who discussed and
debated policy, consumer research, marketing
and branding challenges and new opportunities
for organic farmers.
16
Bord Bia was invited to chair the Organic Marketing
Development Sub-Group of the newly established
National Organic Steering Group, set up by the
Department of Agriculture and Food in 2003.
Féile Bia
The Féile Bia programme is a joint venture between
Bord Bia and the Restaurants Association of Ireland
and is supported by the Irish Hotels Federation and
the farming community. Products covered under
the programme are fresh, unprocessed beef, lamb,
pork, bacon, chicken and eggs. The aims of the
programme are: to enable businesses within the
food service sector source meat and eggs from
quality assured sources; to allow consumers make
informed choices based on a transparent and
verifiable system of product sourcing and
information on origin and to assist members to
promote this unique advantage to their customers.
Féile Bia Membership is on a voluntary basis and is
open to hotels, restaurants, pubs and catering
outlets nationwide. Following a major initiative
undertaken to extend Féile Bia membership
numbers during the year, the total membership at
the end of 2003 had reached 1290 outlets.
Consumer Food,
Dairy and Drinks
The consumer food, dairy, ingredients, drinks and
horticulture sectors accounted for a combined
€4.32billion in exports in 2003. The dairy sector
saw a return to growth with estimated sales
of €1.61billion up 5% and the drinks sector
exceeded €1billion in exports, an increase of 8%,
However, the prepared foods sector recorded a fall
of 5% and edible horticulture exports, primarily
mushrooms, fell by 3%.
The rise in exports of dairy products and beverages
is encouraging. The decline in exports by the
prepared food sector marks a break in the growth
trend of recent years and points to an extremely
competitive marketplace for Irish companies.
The challenge ahead involves relentless cost
reduction combined with investment in
consumer-led new product development to move
up the value chain. Similarly the mushroom sector
has to address its cost base, maintain its retail sales
and diversify into new segments of the market
such as foodservice and ingredients.
Chief Executive’s
Review
Prepared Consumer Foods can be defined as ‘food
products that have undergone secondary
processing.’ Included in the sector are prepared
ready foods such as frozen and chilled ready meals,
pizzas, snacks, ice cream, confectionery products
and ambient grocery products. The sector is a
significant part of the food industry with sales of
€1.52billion. The fall in sales in 2003 occurred
against the background of adverse currency
movements, retail price deflation in the U.K. market
and increased competition from Eurozone
companies.
If the currency change is factored in, export
volumes actually grew by 4%. The overall challenge
for the sector is to increase competitiveness, focus
on innovation and develop new routes to market.
The prepared food sector is typically dominated
by small to medium sized manufacturers operating
in different channels including retail, foodservice,
co-packing and supply to manufacturing across a
number of markets. Predominantly companies in
this sector are building their business in Ireland
and Britain. The combined Irish and British retail
markets are valued at over €170billion. The major
issues facing companies exporting to the British
market are the increasing price-based competition
driven by the retail trade and the risk of sterling
depreciation. Scale is another issue as retailers look
to partner with larger manufacturers. For smaller
Irish companies the choice is either to focus on
well-chosen, highly targeted niche segments or to
actively pursue an expansion programme through
the introduction of new products or through
strategic partnerships.
Bord Bia has a medium term objective to
assist companies sell into continental EU
markets. Most companies in this sector have
little experience of selling outside of Ireland
and Britain. Continental Europe remains a very
diverse market subdivided both geographically
and by national characteristics. A single European
food market or a European consumer has yet to
emerge in food. There is a perception among many
Irish suppliers that Europe is too difficult to crack,
that continued opportunity exists in Britain and that
they do not have the resources available to mount
a sustained export sales drive into continental EU
markets. However, the advent of the euro and in
particular the sterling exchange rate in 2003 has
re-ignited interest in developing new customers in
selected markets in Europe.
Bord Bia believes that success in these markets
will emerge from working closely with individual
companies to identify niches or gaps in the
marketplace and matching these to the supply
capability of interested, capable and competitive
Irish suppliers.
Annual Report and Financial Statements 2003
Prepared Foods
17
Chief Executive’s
Review
Annual Report and Financial Statements 2003
Frozen Food
Britain is the main export market for the frozen
food sub-sector, which consists mainly of ready
prepared meals and pizzas. The frozen foods
market in the U.K. grew by just 2% in 2003,
with the ready prepared segment estimated
to have declined by 3%. Poor performances
and failed product launches by many of the
international brands operating in the category
also contributed to retailers transferring shelf
space to chilled product. The appreciation of
the euro against sterling, the entry of a number
of continental competitors combined with the
heavy use of price promotion by the main retailers
resulted in considerable pressure on margins for
Irish manufacturers operating in the sector.
Confectionery
The confectionery sub-sector is made up of
companies producing chocolate, sugar, snack foods
and bakery products. Chocolate value sales are
predicted to be 5% ahead of last year due to the
cost of cocoa decreasing, a number of new product
launches during 2003 and increasing distribution to
multiples and forecourts. For the confectionery
sector, there is an increasing consumer trend
towards price promotions driven by the multiples
in the British market. The challenge going forward
will be to bring new products to market, which
will exploit increased consumer demand for
convenience, snacking, indulgence and authenticity.
Key to continued success for prepared food
companies in these markets is the provision of
up-to-date market information and intelligence.
During 2003 Bord Bia’s Consumer Foods Division
further developed its strategy of providing
customised or company specific services to
this diverse client base. Information based services
are a key component of this. The Gap Analysis
service remained a firm favourite with companies,
delivering new business opportunities and resulting
in listings for many clients. Gap Analysis is a
consumer-led approach, providing category
solutions to the buyer and is aimed at meeting
consumer needs more effectively. It ensures that
new product development is driven by market and
consumer requirements increasing the chance of
success. A number of new services were added in
2003 including a Brand Audit, Brand Creation and
Brand Design service.
The Brand Forum
Complementing the company specific approach,
The Brand Forum has the objective of promoting
the importance and the advantages of the branded
route to market. The Brand Forum is exclusive to
18
The challenge going forward will be to bring
new products to market, which will exploit
increased consumer demand for convenience,
snacking, indulgence and authenticity.
Chief Executive’s
Review
food and drink companies and members range
in size from multinationals to small enterprises.
The programme provides a centre of excellence
for branding, which delivers new skills to the
industry and promotes the long-term success
of food and drink brands.
Annual Report and Financial Statements 2003
The Brand Forum met four times in 2003,
worked with 15 companies on specific brand
development projects and published the fourth
in a series of practical marketing publications
entitled “A Guide to Marketing Planning”.
20
In late 2003 Bord Bia signed a two-year agreement
with Bank of Ireland Business Banking to partner
the Brand Forum until 2005. The quarterly Brand
Fora can now be supported with practical brand
services, access to exclusive market research and
insight and food and drink brand promotion.
Representatives from more than one hundred
of Ireland’s food, drink and ingredients
manufacturing companies attended Bord Bia’s
Consumer Foods and Drink Industry Day held
in Dublin in September 2003. Themed, Paths
to Growth, the conference provided market
information and insight on retailer and foodservice
trends in Ireland, the U.K. and continental Europe.
Featuring prominent speakers from the U.K. retail
and foodservice sector, the opportunities for
Irish suppliers to grow their business within both
these trade channels featured prominently
throughout the seminar. Representatives from
Bord Bia’s overseas offices held a total of 150
meetings with companies over the two days
to discuss export sales opportunities.
Europe
Bord Bia provided a range of market intelligence
and information during 2003 to improve market
awareness and key account strategy understanding.
These included seminars, retail market reports,
market visits to continental markets and conference
reports. A newsletter was launched from Bord Bia’s
Paris office designed to make Irish companies aware
of developments in the French market. In addition,
25 companies participated on two market study
visits to Britain. The itineraries involved visits to
retail outlets, presentations on the British market
structure and visits to regional distribution centres.
A specific series of market development
programmes for the British market included
market study visits, retailer networking events,
St. Patrick’s Day promotions, inward buyer visits
and ethnic promotions. The Tesco promotion built
on the success in previous years and involved the
in-store promotion of products from 15 companies
in 100 Tesco stores.
Chief Executive’s
Review
As a result of the dramatic changes that typified
the structure of the convenience food retailing
sector in the U.K. in 2003 a seminar focused on
this topic was organised to inform Irish suppliers on
the developments in this segment of the market
and best strategies to apply to access this market.
This was attended by representatives from 60
companies and featured speakers from Nisa Today,
Kerry Direct and Budgens.
On the promotion front, Irish prepared food
companies participated at a number of sector and
channel specific trade shows in continental Europe
including ISM (Confectionery), IFCA (In-flight
Catering Exhibition) TFWA (Tax Free World
Association) and the Speciality and Fine Food Fair,
London.
USA
With exports valued at over €300m in 2003, the
United States is an important market for Irish food
and drink exports. Despite a weak dollar and
increased regulatory environment this year saw a
strong performance in exports from both the
drinks and consumer foods sectors.
An extensive programme of market development
and promotional activities designed to assist Irish
companies develop their market potential was
delivered through the Chicago office. Consumer
food companies participated in a year-long
programme aimed at introducing Irish food
products to the West Coast. In-store promotions
were carried out with key upscale retail accounts.
The programme included over 100 in-store
demonstrations in addition to advertising in retailer
magazines. Business in the eastern half of America,
which has traditionally been the market for Irish
speciality foods, was expanded using similar activity
with new retail accounts.
Annual Report and Financial Statements 2003
Bord Bia’s PERIscope study exploring consumer
attitudes to eating, cooking and shopping in Ireland
was updated to include the U.K. market in 2003,
which highlighted differences between Irish and
British consumer behaviour. The study shows that
there have been significant changes in attitudes
to cooking and shopping in Ireland including
an increased emphasis on price awareness.
In conjunction with five drink sector companies
Bord Bia participated at WSWA, the key wine and
liquor event in the US in the spring. This was
followed up with extensive research on the
opportunities for these companies in the food
service sector. This led to a group visit to the
Bennigan’s chain, which is the largest Irish themed
restaurant group in the US with over 300 outlets.
21
Chief Executive’s
Review
The IFT (Institute of Food Technologists) provided
a platform at their annual meeting to promote
Ireland’s strengths in the food ingredient market.
Four companies joined with Bord Bia on the Irish
Pavilion at the four-day event.
Wal*Mart, the world’s largest retailer, was also a key
target for Bord Bia in 2003. Following on from a
visit to Ireland by the Wal*Mart global sourcing
team in 2002, Bord Bia visited Wal*Mart
headquarters in Bentonville with a group of eight
companies interested in supplying the retailer in the
US. A number of products succeeded in being listed
and follow-up is ongoing.
Annual Report and Financial Statements 2003
Foodservice
As consumers increasingly lead a 24/7 lifestyle,
there is an ever-burgeoning demand for fast and
frequent foodservice options. Consumers eat out
more frequently and there is a consequent growth
in the mid-range and lower-to-mid spend outlets
such as fast casual, sandwiches and coffee bars.
Amongst the changes evident in the foodservice
sector has been the impact of low-carb dietary
formats. This trend will be monitored in 2004
for its sustainability. Eating out is now viewed as
a matter of fact, everyday occurrence rather than
a special event. A large proportion of the public
no longer differentiates between eating out and
eating in. In fact eating in for a special occasion is
increasing. Meals are getting lighter and fewer meals
now include a starter or dessert.
Well-established foodservice brands are increasingly
rolling out their brand in retail environments.
The boundaries between retail and foodservice
continue to blur as deli-cum supermarket concepts
become out-of-home options. Consumers are
looking for a comfortable ‘third space’ in which
to socialise, relax and dine out. The trend towards
the gastro pub is reflective of the new emphasis on
22
couple friendly outlets with comfortable interiors.
The U.K. foodservice market is valued at £24billion
and has recovered well from the recent effects
of September 11th, war with Iraq, SARS and slight
economic downturn.
In 2003, as part of the foodservice programme,
Bord Bia held 66 meetings with U.K. buyers to
present the Irish food industry; organised five buyer
contact events with leading companies including
Whitbread and Scottish and Newcastle; facilitated
four ‘workshops’ for companies looking to enter
the market; produced 12 newsletters providing
an update on market trends and developments;
published two market directories comprising
information on routes to market and key operators
in the major market segments; and worked on
seven individual client projects.
In Ireland, the foodservice market is valued at
€3.5billion and has proven robust following a
period of strong growth in the latter part of the
nineties.
In the Irish market, Bord Bia organised two
seminars attended by over 60 companies,
which focused on distribution into foodservice
and original consumer research. An all-Ireland
directory for foodservice was also launched.
Chief Executive’s
Review
This category comprises basic dairy products
such as butter and cheese as well as ingredients
for further manufacturing such as casein. 2003 saw
a rise of 5% in the value of Irish dairy/ingredients
exports to almost €1.6billion. The poor
performance in the first half of 2003 was a
continuation of the weak worldwide demand in
2002. However, with the exception of whey, the
second half of the year saw a strong increase in
demand for ingredients resulting in increased sales
to third countries.
The improvement in demand worldwide led to
a general increase in exports of all dairy products,
although returns for EU exporters were eroded
somewhat by the adverse euro/sterling/dollar
exchange rates and the reductions in refunds.
With Irish dairy production geared towards
maximising the return from quota-controlled
milk production, the product mix in 2003 saw
some considerable variations compared to 2002.
Overall Irish milk production showed an increase
of some 2% over 2002. Butter increased by around
1.5%, casein by some 7% and WMP by
approximately10%. SMP and chocolate
crumb reduced by around 5% in each case,
cheese production by around 2% and butteroil
by some 14%.
Although EU prices for butter and SMP did
improve, the weighted average returns for
these products remained unchanged in 2003.
Cheese prices in the EU market did not strengthen
mainly due to the 2002 excess stock situation,
which was further exacerbated by increased
production from the Netherlands and Germany.
Irish cheese production reduced by approximately
2% for the year mainly as a direct reaction to
the overstock situation that prevailed in the U.K.
market. Despite a fall of around 9% in U.K. cheddar
production, prices remained weak until the last
quarter of the year which, combined with the
sterling/euro exchange rate, weakened the returns
for Irish producers.
Exports to international markets increased in the
latter part of the year reflecting a strengthening
global market for dairy/ingredients. However,
exports were affected by the appreciation
of the euro against the dollar.
SMP sales to third countries more than doubled
over the same period in 2002, with WMP seeing
an increase of 33%. The demand for casein in the
first half of 2003 was low though prices lifted in the
second half of the year supporting the 7% increase
in Irish casein production. Increased demand from
markets such as Iran, Syria, Nigeria and Mexico
helped bring the stock/supply/demand balance
back into a healthier cycle.
Annual Report and Financial Statements 2003
Dairy & Food Ingredients
Given the diversity within the sector of both
companies and products and given the variable
internal and external influences on it including the
implementation of the changes in CAP, Bord Bia
assistance in 2003 focused on providing market
knowledge and access to buyers in new markets.
The changes in consumer awareness and demand
for health, nutritional and functional foods provided
23
Chief Executive’s
Review
Annual Report and Financial Statements 2003
an opportunity for dairy/ingredient companies to
increase their returns through added value exports.
While convenience has become more important,
it is no longer enough in itself to satisfy changing
consumer demands.
Consequently there is now a growing demand for
convenience foods that are perceived to be good
for one’s general health as well as suiting the new,
faster lifestyles. Functional food can be an answer
to this trend and ingredient companies are to the
forefront in this development. This has led to
increasing usage of Bord Bia as an information
source and coordinator of information and insight
on behalf of the sector. In 2003 Bord Bia organised
the first syndicated purchase of market research for
five of the main value-added ingredient producers
in the sector.
The 2003 programme of events included a seminar
entitled Health & Nutrition: Hearts & Minds, with EU
Commissioner David Byrne as keynote speaker,
supported by experts from the legislative, retail
marketing and research fields. Bord Bia organised
three market study visits to cover the sectors’
geographical and niche market interests, centred
around relevant trade exhibitions and conferences.
These were Food Ingredients China, Shanghai in
March,Vitafoods International, Geneva in May and
Food Ingredients Europe, Frankfurt in November.
Two major ingredient trade exhibitions were
organised with five companies showing at the
Institute of Food Technologists Food Expo, Chicago,
July under the ‘Ireland The Food Island’ banner
with an additional three independent exhibitors.
A total of 11 Irish companies participated at Food
Ingredients Europe, Frankfurt in November.
Beverages
The beverage sector in Ireland includes both
multinational and indigenous, Irish owned
companies involved in the production and
marketing of spirits, liqueur’s, beers, carbonates,
fruit juices and bottled water. Exports of beverages
(including all alcoholic and non-alcoholic beverages
and juices) increased by 8% in 2003 to reach a total
value of €1.02 billion. This increase was primarily
due to strong performances in key markets
such as the U.K., U.S. and continental Europe.
Cream liqueur’s, spirits and malt beer were the
principal product categories.
Consumer lifestyle changes and a move towards
lighter alcohol products and concerns around
‘sensible drinking’ were the main trends during
the year. All the multinational companies market
and promote their products on a global basis and
many new brands are now positioned to sell on
this basis. This remains a challenge for indigenous
suppliers as they build their international
distribution networks.
Great Britain remains the largest export market
for Irish beverages, accounting for 41% of total
exports. However, this market is becoming
increasingly competitive and suppliers are likely
to experience continued price pressure from U.K.
retailers. The U.S. is the second largest market and
accounts for around 18% of total exports.
Spirit sales on the domestic market fell by 20%
in 2003 due to weaker consumer spending and
increased excise duties. Exports of Irish whiskey
expanded by around 8% in 2003 due to the
24
Chief Executive’s
Review
The production of cream liqueurs is the largest
segment of beverage exports and accounts for
approximately 48% of total exports in the sector.
The increase in exports is in double-digit figures
with very strong performances from the U.K. and
U.S. markets.
In 2003, Bord Bia continued to assist Irish beverage
companies with a variety of customised activities
and services specifically designed for the drinks
industry. Building international distribution networks
and developing buyer relationships are key success
factors for the industry. The Bord Bia programme
of activities was developed in cooperation with the
industry and included in the programme was the
organisation of participation at international trade
shows such as Vinexpo in Bordeaux, Tax Free World
Association, Cannes and WSWA, Orlando, USA.
Bord Bia also organised trade missions to the
emerging markets of Czech Republic, Hungary
and Poland during the year.
Edible Horticulture
Irish exports of edible horticulture fell by
approximately 3% in 2003 to €180 million.
The sector is dominated by exports of fresh
mushrooms to the U.K. retail trade. Approximately
75% of all mushroom production in Ireland is
exported to the U.K. retail market, with Irish
producers now supplying nearly 45% of their
total fresh mushroom requirements. Intense price
pressure continues from the U.K. retailers through
Internet auctions and aggressive pricing structures.
The opportunity for any price increases is very
unlikely and margins in the business have been
squeezed considerably in 2003. There has been
increased activity from both Dutch and Polish
producers on the U.K. market and this has also
added to price pressure within the U.K. market.
The Task Force on the Mushroom Industry
was set up by Mr. Noel Treacy, Minister of State,
Department of Agriculture & Food, to examine
the critical issues facing the sector and to draw
up a coordinated action plan to ensure the future
of the industry. Bord Bia, in co-operation with the
major Irish mushroom marketing companies, jointly
funds a quarterly U.K. market information report
provided by Taylor Nelson Sofres providing up-todate data on sales, trends and buying patterns.
Irish companies will seek to take costs out of their
business to help offset the margin squeezing effect
of the continuing downward price pressures and
the increasing activity from EU-based competitors.
One area that is showing some growth for the
industry is the foodservice and food ingredients
sectors in the U.K. Companies will continue to
target new market opportunities as well as
maintaining their share of the retail sector.
Bord Bia is working with the key industry players on
the U.K. market on an individual basis.
Annual Report and Financial Statements 2003
opening and development of new markets and
continued investment in marketing and promotional
campaigns. Exports of stout declined, which is
consistent with the downturn in the overall beer
market, however, good growth was achieved in the
export of a key-brewing component manufactured
in Ireland.
25
Chief Executive’s
Review
Small Business &
Speciality Food
Smaller Irish companies in the speciality food
sector have seen strong sales growth over the
past year targeting the two core markets of Ireland
and Britain.
Annual Report and Financial Statements 2003
Growth is being driven by increased consumer
demand for variety, convenience and pleasure,
which authentic speciality food can offer.
Ireland's small food producers have increased
trade listings and their distribution in Ireland
and Britain has broadened.
It is estimated that speciality foods now have a
total value of €450m at retail prices. The sector
continues to expand and Bord Bia works with
over 300 small food producers assisting them
in successfully marketing their products to
independent and multiple retailers. The sector
has increased trade listings and distribution to
reach an expanding consumer base in line with
a broadening of premium food sales generally
in both Irish and British markets.
Bord Bia delivered services in distribution
improvement, trade and consumer public
relations, marketing competency development,
buyer relationship management and promotions
specifically for the speciality and small business
sector in 2003.
Bord Bia specifically supported Farmers’ Markets
as a new route to market for speciality food to
consumers in Ireland, including web-based advice
* Traditional Artisan Speciality Trade Expertise in Food
26
and assistance for people looking to establish a
market, web-based promotion of 32 farmers’
markets country wide and the set up and
marketing of a farmers’ market at Farmleigh
in conjunction with the OPW.
Bord Bia facilitated the establishment of the
TASTE* Council launched by the Minister for
Agriculture and Food, Mr. Joe Walsh T.D., in
October 2003. This is a representative group
of fine food operators set up to encourage the
strategic development of the speciality food sector.
Bord Bia is the official coordinator for the group
assisting them in designing and agreeing strategic
objectives for the sector’s development.
The goals of the TASTE Council are to raise
the profile of the sector, to provide a vehicle to
represent the strategic development of the sector
in a cohesive manner and to develop practical
outputs for change in order to empower and
enable the development of the sector.
North South Programme
Bord Bia continued its joint North South
programme with Invest Northern Ireland focusing
on developing the marketing capabilities of
speciality food companies. The projects included
joint participation at the Fine Food Fair in London
Chief Executive’s
Review
Ireland The Food Island
One of the main ways in which Bord Bia assists the
Irish food and drink industry is in the promotion
of the capability of the industry to trade buyers
and through the development of the image of
‘Ireland The Food Island’. This is an umbrella brand,
which captures the naturalness, traceability and
confidence in production that customers desire.
The campaign mix includes trade show
participation, direct mail, trade advertising
and selected sponsorships. In 2003 the major
focus of sponsorship activity was the Ireland The
Food Island Champion Stakes. This sponsorship
concluded in 2003 as it had successfully achieved
its original objectives.
Bord Bia will focus its sponsorship resources
from now to 2006 to maximise the benefit to
the food and drink industry from its sponsorship
of the Ryder Cup match that takes place in Ireland
in 2006.
In 2003, Bord Bia in association with the Food and
Drink Federation of IBEC and AIB, launched the
inaugural Ireland The Food Island Food & Drink
Industry Awards to reward best practice in this
important industry. The response from companies
was extremely positive with 196 applications
received across the six categories from 120
companies. The winners were announced at
a Gala Dinner and Awards ceremony attended
by 400 guests. €30,000 was raised for the two
benefiting charities Self Help and Barnardos.
Quality Assurance
Bord Bia has been operating quality assurance
schemes for a number of years. Currently schemes
are operating in the beef, pigmeat and egg sectors
and a scheme in the chicken sector will be formally
issued in 2004. Expert groups representing
producers, processors and the regulatory
authorities developed the schemes. The purpose
of the quality assurance schemes is to facilitate
member companies’ gain a competitive edge in the
marketplace by giving consumers added assurance
about the origin, integrity and wholesomeness of
the product.
In 2003 a key quality assurance activity involved the
revision of the beef quality assurance scheme to
bring it into line with the requirements of the
benchmark standard EN45011. One of the key
requirements of the EN45011 standard relates to
administrative structures and requires that the
body providing the certification is structured so
that it is impartial and allows all interests to
participate without any single interest
predominating. The revised beef scheme, due in
2004, will involve independent auditing and
certification of producers and processors.
Annual Report and Financial Statements 2003
where 14 companies from North and South came
together to exhibit an extended range of products
and meet key independent and retail multiple
buyers. A new marketing best practice programme
was launched with the Northern Ireland Food and
Drink Association (NIFDA) and InterTrade Ireland
to keep food SMEs up-to-date on the scale and
pace of innovation taking place in world food
markets at manufacturing and retail level.
27
Chief Executive’s
Review
Quality assurance is a market necessity and the
EN45011 beef scheme will facilitate the continued
competitiveness of beef in the marketplace.
Annual Report and Financial Statements 2003
Event Services
28
The international trend towards smaller sectoral
shows continued in 2003. Reflecting this trend
and Bord Bia’s focused marketing programmes
Ireland participated at nine sector-focused
exhibitions providing a platform for Irish companies
to promote their capabilities to a targeted
audience. Industry sectors targeted were
ingredients (Food Ingredients Europe and
International Food Technology); confectionery
(ISM); alcoholic beverages (VinExpo); foodservice
(IFCA); speciality food (Maastricht Fine Food Fair
and Fine Food London); travel retail (TFWA);
livestock (Royal Highland Show).
However, the international flagship exhibitions
continued to be of major importance to the meat
and dairy sectors, with participation at Anuga
and World Food Moscow. Exhibitors at Anuga
reported a return in buyer attendance to
pre-2001 levels and all were very satisfied
with the quality of buyers particularly those
from International markets. Over 60 Irish
companies participated under the Ireland
The Food Island banner during 2003.
In addition to trade exhibitions, Bord Bia organised
15 conferences including the National Organics
Conference, Food Safety conference in Cairo
and a seminar on Functional Foods in Dublin
and hosted the Ireland The Food Island Champion
Stakes in Leopardstown. Other major events
coordinated throughout the year included
Bord Bia's participation at the National Ploughing
Championships and in Ireland, The Food Island
Food and Drink industry awards. 35 inward buyer
itineraries were organised in the course of 2003.
Marketing Finance
Throughout the year, two marketing grant
assistance programmes operated. The Marketing
Improvement Assistance Programme (MIAP)
and the Market Participation Programme (MPP)
are both confined to SME food and drink
companies. The MIAP gives assistance to
companies dealing with a range of specific food
products which include bio-yogurts, chilled dairy
products, farmhouse cheeses, jams, preserves
and charcuterie. The MPP deals with companies
manufacturing and marketing other food and
drink products, mainly in the chocolate
confectionery, sauces and alcoholic drink sectors.
In 2003, under Bord Bia’s marketing grants
schemes, one hundred and thirty nine companies
applied. Eighty-five companies received grants
to the value of €973,000.
Chief Executive’s
Review
Information Services
The Client Portal or Extranet was launched
mid-year and provides electronic access to Bord Bia
material that is largely available in printed form as
well. However, companies can access the material
around the clock and the technology will enable
Bord Bia deliver additional services via this medium
that would be prohibitively expensive in traditional
printed form.
Information services published reports on
the domestic market for organic products
and the associations consumers in Europe
attribute to products of Irish origin. An update
of the PERIscope (Purchasing and Eating in the
Republic of Ireland) study was undertaken in 2003,
on this occasion comparing Irish consumers to their
British counterparts.
A number of exploratory papers were produced
which synthesised published material on the topics
included vending and the mature consumer market.
In addition, a research note on the Brazilian beef
industry was published. The Information
department dealt with 4560 direct enquiries from
Irish companies and Bord Bia’s website received in
excess of 98,000 hits.
Annual Report and Financial Statements 2003
During the year, Bord Bia went live with two
extranets that it had been developing throughout
2002. The Producer Portal is an on-line version
of its printed Market Monitor and was offered
to renewing subscribers. As well as offering faster
access to information for readers, it has allowed
a saving on print and postage costs.
Michael Duffy*
Chief Executive
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
29
Corporate
Statement
Governance
Equality
The Board adopted the Code of Practice for the
Governance of State bodies in December 2001 and
the provisions of the Code are being implemented.
The Board is committed to maintaining the highest
standards of Corporate Governance and Best
Practice and monitors compliance on an ongoing
basis. The Secretary is responsible to the Board for
ensuring that procedures are implemented and that
relevant legislation, regulations and guidelines are
complied with.
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.
Annual Report and Financial Statements 2003
Ethics in Public Office
30
The provisions of the Ethics in Public Office Act
1995 and the Standards in Public Office Act 2001
are being implemented.
Freedom of Information
Bord Bia is a prescribed organisation under
the Freedom of Information Act (FOI) 1997.
The Act established three new statutory rights:
• A legal right for each person to access
information held by public bodies;
• A legal right for each person to have official
information held by a public body, relating to
him/herself, amended where it is incomplete,
incorrect, or misleading;
• A legal right to obtain reasons for decisions
affecting oneself taken by a public body.
Safety, Health and
Welfare at Work
Bord Bia is implementing the provisions of Safety,
Health & Welfare at Work legislation, including the
preparation and operation of a Safety Statement
embracing all matters affecting safety, health and
welfare of staff and visitors to Bord Bia’s premises.
Clients’ Charter
Bord Bia has published a Clients’ Charter setting
out its commitment to the Principles of Quality
Customer Service for Customers and Clients of
the Public Sector. The Charter is supported by an
Action Plan and appropriate internal procedures
to give practical effect to this commitment.
Corporate
Statement
Bord Bia is committed to making every effort
possible to be energy-efficient and to operate
appropriate conservation and recycling measures.
Board Responsibilities
Section 21 of An Bord Bia Act 1994 requires the
Board to "keep in such form and in respect of such
accounting periods as may be approved by the
Minister, with the consent of the Minister for
Finance, all proper and usual accounts of monies
received or expended by it, including an Income
and Expenditure Account, a Cash Flow Statement
and a Balance Sheet and, in particular, shall keep in
such form as aforesaid all such special accounts as
the Minister may, or at the request of the Minister
for Finance shall, from time to time direct and the
Board shall ensure that separate accounts shall be
• 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.
Philip Lynch
Chairman
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:
• Select suitable accounting policies and
then apply them consistently.
• Make judgements and estimates that
are reasonable and prudent.
Patrick J. Moore*
Interim Chief Executive
Annual Report and Financial Statements 2003
Energy Efficiency
and Conservation
• Prepare the financial statements on the
going concern basis unless it is inappropriate
to presume that the Board will continue
in operation.
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
31
Corporate
Statement
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
as acceptable;
• Assessing the likelihood of identified
risks occurring;
• Working closely with Government and various
Agencies to ensure that there is a clear
and operated.
understanding of Bord Bia goals and support
for the Board’s strategies to achieve those goals.
absolute assurance that assets are safeguarded,
The system of internal financial control is based on
transactions authorised and properly recorded
a framework of regular management information,
and that material errors or irregularities are either
administration procedures including segregation of
prevented or would be detected in a timely period.
duties and a system of delegation and accountability.
The Board has taken steps to ensure an appropriate
Annual Report and Financial Statements 2003
the extent and categories which it regards
system of internal financial control is maintained
The system can provide reasonable, but not
32
implication of risks facing the body including
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.
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,
The Board has established processes to identify and
which operates in accordance with the Framework
evaluate business risks by :
Code of Best Practice set out in the Code of
• Identifying the nature, extent and financial
Practice for the Governance of State Bodies.
Corporate
Statement
The Board’s monitoring and review of the
effectiveness of the system of internal financial
control is informed by the work of the Internal
Auditor, the Board Audit Committee which
oversees the work of the internal auditor, the
executive managers within Bord Bia who have
responsibility for the development and maintenance
of the financial control framework and comments
made by the Comptroller and Auditor General in
his management letter.
Annual Review of Controls.
I confirm that in the year ended 31 December 2003
the Bord conducted a review of the effectiveness of
the system of internal control.
On behalf of the Board
Philip Lynch, Chairman
Annual Report and Financial Statements 2003
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.
33
Board Membership
year ended 31 December, 2003
Chairman
Chief Executive
Secretary
Mr Philip Lynch
Chairman,
IAWS Group plc
Mr Michael Duffy*
Mr Seamus Kenny
MEMBERS
CHANGES DURING 2003
Mr Dan Browne
Managing Director, Dawn Meats (Grannagh) Ltd.
Term expired 30 June 2003:
Dr Noel Cawley
(re-appointed 9 July 2003)
Mr David Callinan
Teagasc
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 Michael Kilcoyne
Chairman, Consumers’ Association of Ireland
Term expired 13 December 2003:
Mr Dan Browne
(re-appointed 31 December 2003)
Mr William O’Kane
Term expired 15 December 2003:
Ms Gina Quin
(re-appointed 31 December 2003)
Term expired 14 December 2003:
Mr Pat O’Rourke
(re-appointed 31 December 2003)
Appointed 31 December:
Ms Bríd Rodgers
Mr Dan Lenihan
Chairman, Bord Glas
Mr Denis Lucey
Director, IAWS Group plc
Mr Pat O’Rourke
President, Irish Creamery Milk Suppliers’
Association (ICMSA)
Annual Report and Financial Statements 2003
Ms Marian Byrne
Principal Officer, Department of Agriculture &
Food
Mr Joseph O’Sullivan
Chief Executive, Drinagh
Co-Operative Society Ltd.
Ms Gina Quin
Chief Executive, Dublin Chamber of Commerce
Ms Bríd Rodgers
former Minister for Agriculture, Northern Ireland
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
35
Consumer Foods
Board Membership
year ended 31 December, 2003
Chairman
Mr Michael Dowling
Company Director,Visiting Professor UCC,
and Head of Agri Strategy,AIB
MEMBERS
CHANGES DURING 2003
Ms Darina Allen
Ballymaloe Cookery School
Resigned 24 February 2003:
Mr John Toomey
Ms Dorothy Gallagher
Vice-Chairman, Consumers’ Association of Ireland
Term expired 9 April 2003:
Ms Dorothy Gallagher
(re-appointed 30 May 2003)
Annual Report and Financial Statements 2003
Mr Pat Given
Ex-UDV Operations Ireland
36
Ms Eilis Gough
Managing Director, Mileeven Fine Foods
Term expired 17 July 2003:
Ms Eilis Gough
(re-appointed 20 October 2003)
Mr Tom Harrington
Arabawn Co-Op. Nenagh
Mr Larry Murrin
(re-appointed 20 October 2003)
Ms Paula Mee
Food & Nutrition Consultant
Mr Larry Murrin
Managing Director, Dawn Farm Foods
Ms Maura O’Donovan
Poultry Instructress
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
Meat & Livestock
Board Membership
year ended 31 December, 2003
Chairman
MEMBERS
CHANGES DURING 2003
Mr Michael Behan
Chairman, Irish Meat Association
& Managing Director, Fair Oak Foods
Term expired 22 June 2003:
Mr Derek Deane
(re-appointed 20 October 2003)
Mr Sean Buckley
Associated Craft Butchers of Ireland
Mr John Madden
(re-appointed 20 October 2003)
Mr Paul Clarke
National Executive of the Livestock Trade
Mr Nicholas Ryan
Mr Derek Deane
Chairman, National Livestock Committee, IFA
Appointed 20 October 2003:
Mr John O’Leary
Mr Laurence Fallon
Chairman, National Sheep Committee, IFA
Resigned 30 June 2003:
Dr Pat Mulvehill
Mr Alan Graham
IFA Poultry Committee
Mr John Horgan
Managing Director, Kepak Group
Mr John Madden
Chief Executive, Glanbia Meats
Ms Brid O’Connor
Assistant Director,
Office of the Director of Consumer Affairs
Mr Pat O’Keeffe
Chairman, National Pigs Committee, IFA
M John O’Leary
Irish Creamery Milk Suppliers’ Association
(ICMSA)
Annual Report and Financial Statements 2003
Mr Denis Lucey
Director, IAWS Group plc
37
Quality Assurance
Board Membership
year ended 31 December, 2003
Chairman
Mr Joseph O’Sullivan
Chief Executive,
Drinagh Co-Operative Society Ltd.
MEMBERS
CHANGES DURING 2003
Professor Joe Buckley
Dept. Food Science & Technology, UCC
Appointed 3 February 2003:
Mr Joseph O’Sullivan
Mr John Cunningham
General Manager, Dairygold Food Products
Resigned 15 May 2003:
Dr. Pat Wall
Annual Report and Financial Statements 2003
Mr Derek Deane
Chairman, National Livestock Committee, IFA
Mr Dermot Jewell
Chief Executive, Consumers’
Association of Ireland
Mr Derek Deane
(re-appointed 20 October 2003)
Mr Paul Nolan
General Manager,
Dawn Meats (Grannagh) Ltd.
Mr Eamon Quinn
(re-appointed 20 October 2003)
Mr Eamon Quinn
Deputy Director, Superquinn
Resigned 29 July 2003:
Mr Kevin Cassidy
Ms Brid O’Connor
Assistant Director,
Office of the Director of Consumer Affairs
Appointed 18 December 2003:
Mr Bert O’Reilly
Dr Jim O’Grady
Consultant
Mr Bert O’Reilly
Department of Agriculture & Food
Mr Pat O’Rourke
President,
Irish Creamery Milk Suppliers (ICMSA)
Mr Brendan Smyth
Chief Adviser, Glanbia
38
Term expired 7 July 2003:
Mr John Cunningham
(re-appointed 20 October 2003)
Organisation
Structure
Bord Bia is comprised of the Board, three Subsidiary Boards, the Chief Executive and the Executive, which
provide the range of operational and corporate services required to implement Board policy and
programmes.
The Board is comprised of a Chairman and 14 ordinary members appointed by the Minister for Agriculture
and Food. There are three Subsidiary Boards (Meat & Livestock, Consumer Foods and Quality Assurance)
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.
Board
Quality
Assurance Board
Meat & Livestock
Board
Consumer
Foods Board
Board
Committees
Chief Executive
Administration
Operations
Directorate
Client Services
Directorate
Annual Report and Financial Statements 2003
The following Board Committees are in place: Audit Committee, Remuneration & Pensions Committee
and Strategy Committee. The Executive is comprised of staff based in the Board’s head office and overseas.
Consumer Foods,
Marketing &
Communications
39
Staff
Annual Report and Financial Statements 2003
Structure
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
40
Report
of the Comptroller & Auditor-General
Respective Responsibilities of the
Members of An Bord Bia and the
Comptroller and Auditor General
The accounting responsibilities of the Members of
An Bord Bia are set out in the Corporate
Statement on pages 30 to 33. 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 32 and 33
reflects An Bord Bia’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 2003 and of
its income and expenditure and cash flow for
the year then ended.
John Purcell
Comptroller and Auditor General
25 June 2004
Annual Report and Financial Statements 2003
I have audited the financial statements on pages 42
to 55 under section 21 of An Bord Bia Act 1994.
41
Statement of
Accounting Policies
(a) Basis of accounting:
These financial statements are prepared
under the accruals method of accounting,
except as indicated below, and in accordance
with generally accepted accounting principles
under the historical cost convention.
Financial Reporting Standards recommended
by the accountancy bodies are adopted as
they become operative. The unit of currency
is the Euro.
(b) Keeping of accounts:
Annual Report and Financial Statements 2003
Subsidiary Boards:
Under the terms of An Bord Bia Act, 1994, the
Board is assisted by three Subsidiary Boards in
respect of Meat and Livestock and Consumer
Foods and Ingredients. All income and
expenditure relating to these Subsidiary
Boards is reflected in these financial statements.
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 Quality Beef Promotion
Fund is released to revenue in line with related
expenditure and any unexpended balance is
included in Creditors.
42
(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:
Leasehold improvements
Furniture & fittings
Office equipment
Computer equipment
Motor vehicles
10%
12.5%
20%
331/3%
20%
(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.
Statement of
Accounting Policies
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.
The disclosures required under the transitional
arrangements of Financial Reporting Standard
17 “Retirement Benefits” for the year ended
31 December 2003 are shown in Note 15.
(g) Leased assets:
Assets held under leasing arrangements that
transfer substantially all the risks and rewards
of ownership (finance leases) to Bord Bia are
included in the balance sheet as tangible fixed
assets at cost less accumulated 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.
(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 the Board is credited
to the Capital Account as set out in Note 2,
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.
Annual Report and Financial Statements 2003
(f) Superannuation:
43
Income and Expenditure
Year ended 31 December 2003
Notes
2003
€'000
2002
€'000
17,003
(3)
5,588
2,404
24,992
263
25,255
18,507
231
5,297
2,796
26,831
(667)
26,164
13,854
973
10,260
25,087
15,755
804
9,629
26,188
68
69
237
(24)
93
69
Income
Oireachtas Grant-in-Aid
EU Quality Beef Promotion Fund
Statutory Levy
Project and Other Income
Transfer from / (to) Capital Account
Total Income
1a
1b
1c
2
Annual Report and Financial Statements 2003
Expenditure
Marketing and Promotional Expenditure
Marketing Finance
Operating Expenditure
Total Expenditure
Surplus/(Deficit) for Year
Balance at 1 January
Balance at 31 December
3
4
5
Bord Bia 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 17 form part of these financial statements.
Philip Lynch
Chairman
Patrick J. Moore
Interim Chief Executive *
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
44
Balance Sheet as at
31 December 2003
Notes
2003
€'000
2002
€'000
1,324
8
1,332
1,587
8
1,595
8
1,474
672
2,154
9
2,187
381
2,577
1,925
2,516
229
61
1,561
1,656
1,324
237
1,561
1,587
69
1,656
Assets Employed
Fixed Assets
Tangible Assets
Financial Assets
6
7
Stocks
Debtors
Cash at bank and in hand
8
Creditors
(amounts falling due within one year)
9
Net Current Assets
Total Assets less Current Liabilities
Financed by
Capital and reserves
Capital account
Income and expenditure account
2
The Statement of Accounting Policies and Notes 1 to 17 form part of these financial statements.
Philip Lynch
Chairman
Patrick J. Moore
Interim Chief Executive *
Annual Report and Financial Statements 2003
Current Assets
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
45
Cash Flow Statement
Year ended 31 December 2003
2003
€’000
2002
€'000
168
(54)
377
(263)
3
713
1
(634)
8
35
(24)
(84)
431
667
49
(148)
(5)
123
(49)
373
354
1,333
354
54
408
1,333
84
1,417
(117)
(1,147)
Increase in Cash
291
(394)
Reconciliation of net cash flow to movement of funds
Increase in Cash
Net funds at 1 January
291
381
270
111
Net funds at 31 December
672
381
Reconciliation of Surplus/(Deficit) to Net Cash
Annual Report and Financial Statements 2003
Inflow from Operating Activities:
Surplus/(Deficit) for year
Net Interest receivable
Depreciation
Capital account transfer
Loss on Disposal of tangible fixed assets
Decrease/(Increase) in debtors
Decrease/(Increase) in stocks
(Decrease)/Increase in trade creditors
Increase/(Decrease) in taxation and PRSI
Increase/(Decrease) in accrued and deferred income
Net cash inflow from operating activities
CASHFLOW STATEMENT
Net cash inflow from operating activities
Bank interest received
Net current inflow/(outflow) of funds
Capital expenditure
Payment to acquire tangible assets
The Statement of Accounting Policies and Notes 1 to 17 form part of these financial statements
Philip Lynch
Chairman
Patrick J. Moore
Interim Chief Executive *
* See note on page 7 regarding Interim Chief Executive from 7th May 2004
46
Notes forming part of the
Financial Statements
Year ended 31 December 2003
1. Income
(a) Included in Oireachtas Grant-in-Aid is €4,545,000 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.
2. Capital Account
€'000
1,587
117
(3)
(377)
(263)
Balance at 31 December 2003
3. Marketing and Promotional Expenditure
Marketing Development Programmes
Trade Fairs and Exhibitions
Information Services
Quality Assurance
Trade Services
Marketing Services
Communications
Nutritional Advisory Services
1,324
2003
€'000
2002
€'000
6,199
2,116
1,258
643
2,105
777
260
496
13,854
6,476
2,633
2,026
642
2,094
1,210
322
352
15,755
Annual Report and Financial Statements 2003
Balance at 1 January 2003
Amount capitalised in respect of purchased tangible assets
Net amount realised on disposal of assets
Amortisation in line with asset depreciation
Net transfer from Income and Expenditure Account
2003
€'000
47
Notes forming part of the
Financial Statements
Year ended 31 December 2003
4. Marketing Finance
Marketing Improvement Assistance Programme
Market Participation Programme
2003
€'000
2002
€'000
485
488
436
368
973
804
310
5,805
1,467
242
2,042
14
377
3
10,260
351
5,369
1,269
254
1,893
13
431
49
9,629
Annual Report and Financial Statements 2003
5. Operating Expenditure
48
Board and Sub-Board Members' fees and expenses
Staff costs
Rent, rates and insurance
Telecommunications costs
General business expenses
Audit fee
Depreciation (Note 6)
Loss on disposal of tangible assets
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
4,667
375
763
5,805
4,396
314
659
5,369
The total number of employees (including part-time persons) at 31 December 2003 was 79 (2002: 79).
The cost of certain part-time employees is included in Marketing and Promotional Expenditure.
Notes forming part of the
Financial Statements
Year ended 31 December 2003
6. Tangible Fixed Assets
Leasehold
improvements
Furniture
and fittings
Computer
equipment
Office
equipment
Motor
vehicles
Total
€000
€000
€000
€000
€000
€000
526
43
(16)
553
586
3
(8)
581
96
410
59
(6)
463
45
1,970
377
(21)
2,326
118
176
51
68
1,324
1,587
Cost
At 1 January 2003
Additions in year
Disposals
At 31 December 2003
1,637
59
712
12
1,696
724
613
169
515
56
782
571
404
76
(15)
465
914
1,024
153
197
88
122
96
3,557
117
(24)
3,650
At 1 January 2003
Charged in year
Disposals
At 31 December 2003
28
17
Net Book Amounts
At 31 December 2003
At 31 December 2002
7. Financial Fixed Assets
The Irish Food Board (An Bord Bia) France SARL is wholly-owned by An Bord Bia. The company
does not trade. It rents property on behalf of Bord Bia and these costs are fully reflected in these
financial statements.
Annual Report and Financial Statements 2003
Depreciation
49
Notes forming part of the
Financial Statements
Year ended 31 December 2003
8. Debtors
Amounts falling due within one year:
Debtors
Prepayments and accrued income
2003
2002
€'000
€'000
1,113
361
1,474
1,435
752
2,187
44
149
1,732
1,925
678
141
1,697
2,516
111
38
149
104
37
141
9. Creditors (amounts falling due within one year)
Annual Report and Financial Statements 2003
Trade creditors
Taxation and social welfare (Note 10)
Accruals and deferred income
10. Taxation and Social Welfare
Taxation and social welfare creditors comprise the following:
Income Tax
P.R.S.I.
An Bord Bia is not liable to corporate taxes in Ireland or in the countries in which it operates because
it is a non-commercial State-sponsored body.
It is liable to employer taxes in Ireland and complies with related withholding, reporting and payment
obligations. In some other countries in which it operates, an exemption from local taxation has been
availed of under the governmental services article of the double taxation agreement. This position is
currently under review by Bord Bia which is actively seeking clarification to determine whether overseas
employment taxes arise in any of the jurisdictions where this exemption has been availed of. The review
may result in a liability to taxes in some jurisdictions, but given that this decision rests with the various
jurisdictions in question, there are uncertainties in relation to the amount and timing of any liabilities, if any.
At the balance sheet date it was not possible to make a reliable estimate of these possible contingent
liabilities and, consequently, no provision has been made in the financial statements for the year ended
31 December 2003.
50
Notes forming part of the
Financial Statements
Year ended 31 December 2003
11. Provisions for Liabilities and Charges
Value Added Tax
At
1 January
2003
€'000
Provided
during
year
€'000
At
31 December
2003
€'000
244
156
400
This provision is included within Creditors.
12. Commitments
(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, 003,217 made up as follows:
Payable on leases on which the commitment expires:
€’000
Within one year
Within two to five years
Six years and over
40
820
143
1,003
Annual Report and Financial Statements 2003
(a) Capital Commitments
An Bord Bia had no capital commitments at the year end.
51
Notes forming part of the
Financial Statements
Year ended 31 December 2003
13. Contingent Liabilities
(a) Contingent liabilities exist in respect of amounts approved but unclaimed at the year end under the
terms of the following Marketing Finance Programmes operated by An Bord Bia as follows:
Annual Report and Financial Statements 2003
Marketing Improvement Assistance Programme
Market Participation Programme
52
2003
€'000
2002
€'000
250
193
608
505
443
1,113
(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.
14. Recoverable Incentives
Under the terms of the Targeted Marketing Consultancy (TMC) Programme, a total of €2,911 was due
to be recovered in 2004 and subsequent years from participating companies:
Estimated amount recoverable at end of year
2003
2002
€'000
€'000
3
3
Recoverable incentives are accounted for on a cash receipts basis and accordingly are not included
in debtors.
Notes forming part of the
Financial Statements
Year ended 31 December 2003
15. Superannuation
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
An actuarial valuation of An Bord Bia Superannuation Fund was carried out as at 31 December 2003 for the
purpose of preparing this FRS17 disclosure. The Fund assets are stated at their mid-market value at each
balance sheet date.
The financial assumptions used to calculate the retirement benefit liabilities under FRS 17 were as follows:
Valuation Method
31/12/03
31/12/02
Projected Unit
Projected Unit
Discount Rate
5.50%
5.50%
Inflation Rate
2.25%
2.25%
Salary Increases
4.50%
4.50%
The market value of the assets of the Fund and the expected rates of return were:
Long-term rate of
Value at
Long-term rate of
Value at
return expected
31-Dec-03
return expected
31-Dec-02
at 31-Dec-03
€'000
at 31-Dec 02
€'000
7.75%
7,029
7.75%
5,152
Equities
Bonds
4.75%
1,726
4.75%
1,592
Property
6.75%
503
6.75%
84
Cash
3.00%
228
3.00%
861
Total market value of superannuation fund assets
Contributions due to be paid
Present value of funded pension liabilities
Net deficit in pension scheme
9,486
Annual Report and Financial Statements 2003
the financial statements.
7,689
16
(13,246)
(12,564)
(3,744)
(4,875)
53
Notes forming part of the
Financial Statements
Year ended 31 December 2003
15. Superannuation (contd.)
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
Year ended
31/12/03
31/12/02
€'000
€'000
551
462
Past service costs
–
–
Irrecoverable surplus recognised against past service costs
–
–
Settements and curtailments
–
–
Included in payroll costs:
Current service costs
Irrecoverable surplus recognised against settlements and curtailments
Net operating profit charge
–
–
551
462
Annual Report and Financial Statements 2003
Included in finance costs:
Interest cost
711
549
(528)
(652)
183
(103)
assets – (gain)/loss
(632)
2,157
Experience (gains)/losses on fund liabilities
(717)
1,464
–
1,128
(1,349)
4,749
(4,875)
(284)
(551)
(462)
Expected return on assets
Net finance costs
Included in statement of total recognised gains and losses:
Difference between expected and actual return on
Effect of changes in actuarial assumptions – (gain)/loss
Net in statement of total recognised (gains)/losses
{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
516
517
Other finance income
Contributions
(183)
103
Actuarial gain/(loss)
1,349
(4,749)
(3,744)
(4,875)
Year ended 31/12/03
Year ended 31/12/02
€'000
€'000
(632)
2,157
Deficit in Fund at end of year
History of actuarial gains and losses
Difference between expected and actual return on assets
54
Expressed as a percentage of fund assets
(6.7%)
28.1%
Experience (gains)/losses on fund liabilities
(717)
1,464
Expressed as a percentage of fund liabilities
(5.4%)
11.7%
Total actuarial (gains)/losses
(1,349)
4,749
Expressed as a percentage of fund liabilities
(10.2%)
37.8%
Notes forming part of the
Financial Statements
Year ended 31 December 2003
16. Board Members – Disclosure of Transactions
In the normal course of business the Board may approve grants and may also enter into other contractual
arrangements with undertakings in which Bord Bia Board Members are employed or otherwise interested.
The Board adopted procedures in accordance with the guidelines issued by the Department of Finance in relation
to the disclosure of interests by Board Members and these procedures have been adhered to by the Board during
the year. No grants were approved, or were paid during the year to companies with which Board Members are
associated.
17. Amalgamation with Bord Glas
Under the terms of An Bord Bia (Amendment) Act, 2004, An Bord Glas is being dissolved and its functions
transferred to Bord Bia with effect from 1 July 2004. At that date, all assets and liabilities of An Bord Glas will
be transferred to Bord Bia at book value. To date, no additional expenses or losses have been incurred by
Bord Bia as a result of the amalgamation.
These financial statements have been prepared on the going concern basis and no adjustment has been made
Annual Report and Financial Statements 2003
to reflect the fact that the amalgamation is to take place.
55
Marketing Finance
Annual Report and Financial Statements 2003
Grant Payments 2003
56
Company
€ Amount
4e Fulfilment.com Ltd
15,000
Allin All Ingredients Ltd
15,475
Ardrahan Dairy Products Ltd
14,564
Benson Foods
5,000
Blenders
12,000
Bunratty Mead & Liqueur
22,400
Butlers Pantry
28,000
Cahill International
3,393
Carlow Craft Brewery Ltd
3,200
Carrigaline Farmhouse
3,000
Celtbury Ltd
20,000
Celtic Chocolates Ltd
4,000
Chocaid.Com Ltd
1,000
Cisti Gugan Barra Teo
18,902
Clonakilty Food Co
40,000
Cooley Distillery
27,431
Coolmore
13,196
Cottage Foods
1,000
Country Cooking Ltd
14,000
Country Crest
10,000
Country Kitchen Cuisine Ltd
8,000
CPAC
15,600
Cybercolors Ltd
12,179
Dave & Teri's Cookies
12,000
Derryvilla Farm
5,000
Druid Chocolates Ltd
1,553
Dundalk Food Products t/a Malones
10,619
Durrus Cheese
4,882
Eastdale, the Real Irish Food Co
3,250
Ennis Foods Ltd
30,000
First Ireland Spirits Ltd
43,400
Flahavans
11,736
Flair Confectionery
1,080
Follain Teo
12,471
Foxrock Food Company Ltd
5,163
Fruitfield Foods Ltd (Formerly Nestlé Irl) 35,000
Gaelic Heritage
1,532
Gallwey's of Waterford
757
George Mogerley Ltd
4,000
Glaslough Foods
15,750
Glenboy Goats Products
12,000
Glenhaven
40,000
Glenilen Farm
2,635
Company
€ Amount
Glenisk Ltd
3,000
Good Herdsmen Ltd
20,158
Green Pastures
6,149
Gubbeen Farmhouse Cheese
4,500
Harney Enterprises Ltd
922
Heatherfield Ltd t/a Seerys
10,959
Hot Irishman Ltd
3,400
Hyde Ltd
18,000
Ingredient Solutions
3,240
Irish Bay Tree Traditional
399
Irish Food and Drink Exports Ltd
4,000
J&L Grubb
15,000
John O'Sullivan & Co
6,654
Lily O'Briens Chocolates
40,000
Lios na Grai Ltd
3,550
Lir
33,406
M&S Browne Ltd
8,000
Marchminder Ltd
7,000
Marigot
3,500
Mileevin Ltd
3,454
Moyle Salads
3,673
My Own Food Products Ltd
2,593
Nature's Best
35,000
Nutrition Supplies & Services Ltd
26,560
PG Brogan & Company Ltd
19,034
Protocol Food Ingredients Ltd
4,464
Quality Irish Foods
3,500
Roaring Water Bay (Boru Vodka)
11,893
Rock Island Foods
520
Rosscarbery Oysters Ltd
1,288
Sam's Cookies Ltd
2,000
Shalvey's Poultry
17,850
Shannonside Mushroom Mktg Ltd
5,000
Silver Pail Dairy Ltd
9,393
Stable Diet
7,394
SuSi Foods Ltd
788
The Or Organisation Ltd
3,000
The Porterhouse
12,620
Twine Inc
4,558
Whelan's/Elliotts
2,154
Wildes Irish Chocolates
3,833
Zed Candy
40,000
Total
€ 972,574
Annual Report and Financial Statements 2003
Notes
57
Annual Report and Financial Statements 2003
Notes
58
Annual Report and Financial Statements 2003
Notes
59
Annual Report and Financial Statements 2003
Notes
60
Annual Report and Financial Statements 2003
Notes
61