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annual report and financial statements 2002
•
Chairman’s Statement
3
•
Ráiteas an Chathaoirligh
5
•
Chief Executive’s Review
9
•
Corporate Statement
29
•
Board Membership
32
•
Organisation Structure
36
•
Report of the Comptroller
and Auditor General
38
•
Statement of Accounting Policies
39
•
Income and Expenditure Account
41
•
Balance Sheet
42
•
Cashflow Statement
43
•
Notes Forming part of the Financial
Statements
44
•
Marketing Finance Grant Payments 2002
52
To the Minister for Agriculture and Food
In accordance with Section 22 of An Bord Bia Act 1994, the Board is pleased to submit to the Minister
its Annual Report and Accounts for the year ended 31 December 2002.
Philip Lynch
Michael Duffy
Chairman
Chief Executive
Exports 2002
Irish Food & Drink Exports (€m)
2002(e)
145
134
Animal Foods
Fish
Live Animals
Poultry
105
58
140
140
200
219
Ed. Horticulture
Sheepmeat
2001(p)
380
370
160
260
270
Pigmeat
330
955
Beverages
889
1,185
Beef
902
1,455
Dairy
1,745
1,800
Prepared Foods
1,635
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1
Exports By Sector (Value in €m)
2001(p)
2002(e)
% of 2002 Exports
Animal Foods
134
145
2%
Fish
370
380
6%
Live Animals
58
105
2%
Poultry
140
140
2%
Edible Horticulture & Cereals
219
200
3%
Sheepmeat
260
160
2%
Pigmeat
330
270
4%
Beverages
889
955
14%
Beef (1)
902
1,185
17%
Dairy Products (1)
1,745
1,455
21%
Prepared Foods
1,635
1,800
27%
Total value of Irish food and drink exports
6,682
6,795
100
(1) Including refunds
Annual Repor t and Financial Statements 2002
Chairman’s
Statement
I am pleased to report on the continued
development of the Irish food and drink industry
in 2002. Industry performance points to the
resilient nature of companies operating in an
increasingly competitive environment.
Despite a number of factors - such as the
uncertain economic environment, increased
competition and currency appreciation - it is
encouraging to see the positive performance of a
number of sectors counterbalancing the
difficulties experienced in others. I am confident
that Bord Bia has the strategy, personnel and
services to assist Irish food and drink companies
achieve their growth objectives.
“
Flexibility, innovation and speed of response are key
competitive advantages for Irish companies
in the current environment.. ”
Annual Repor t and Financial Statements 2002
Looking forward, the market continues to change
and evolve at a fast pace posing many challenges
for Irish companies.There are increased levels
of internationalisation in the grocery trade with
retailers looking abroad for growth because of
limiting domestic market conditions.The growth
of discounters across Europe, and not just
Ireland, offers challenges to established retailers
and to suppliers. Retailers continue to
consolidate and devote more efforts to take
costs out of the supply chain. In 2002 we saw
the introduction of factory gate pricing as the
latest supply chain initiative.The Euro has led to
more transparent pricing across Europe resulting
in consumer dissatisfaction with perceived price
disparities across markets.The single currency has
also led to a growth in pan European sourcing by
larger European retailers and in some categories
the aggressive targeting of the UK market by
large continental based manufacturers.
In Britain, retailer brands have developed a level
of recognition comparable to many top brands.
Retailers are responding in this and other ways to
a more demanding consumer. Demand continues
to grow in the Food to Go category and we see
the return of major retailers into the High Street
convenience retail sector particularly in Britain.
Bord Bia is tracking these developments in the
marketplace and is responding accordingly.
A new beef strategy, entitled New Challenges
New Opportunities - Marketing Irish Beef 2003
- 2007 has been developed and establishes key
market and promotion priorities going forward. In
the consumer food and drink sectors, our
strategy is to provide a range of customised
services to meet the individual needs of a diverse
range of companies and products that make up
this sector. With regard to Small Business, key
opportunities are being exploited with a focused
programme being effected in the Irish and
British markets.
Flexibility, innovation and speed of response are
key competitive advantages for Irish companies
in the current environment. I am confident that
Bord Bia is responding to the marketplace
challenges and working to ensure its resources
are allocated to deliver maximum return on
investment and provide effective and innovative
market development, promotion and information
services. In order to continue to do this
efficiently and to ensure that the organisation
operates at best practice level and is a market
leader in its field, it must be committed to
change. It must have a Board and Staff that can
internalise a change culture and drive the
dynamics of change that are essential for growth
and success. I believe we have such a Board and
such a Staff. As long as we continue to bring
together and channel the right mix of energy and
strategic vision then we will continue to achieve
our objectives and deliver value to our
stakeholders.
Annual Repor t and Financial Statements 2002
3
Chairman’s
Statement
4
It has been another successful year and I am
pleased once again to mark our progress and
achievements and to thank the people both
inside and outside the organisation who made
them happen. Governance and approval of
strategic direction is the responsibility of the
Board and I am most appreciative of the very
considerable inputs of my colleagues, whose
commitment and dedication I admire and whose
support and advice I greatly value.The Board is
assisted by three Subsidiary Boards (Meat &
Livestock, Consumer Food and Drink, and Quality
Assurance). Not only do these Subsidiary Boards
carry out their sectoral remits with great
dedication and skill, but collectively they bring
together an extended pool of talent and
expertise, which complements the work of the
Board and assists Bord Bia in the implementation
of its programmes.
While the Annual Report is rightly seen as an
accounting for our stewardship, I also value it as
an opportunity publicly to say thank you to our
Chief Executive, Management and Staff. It is on
them that the Board relies to be the real agents
of change and development and to achieve
Bord Bia’s strategic objectives for our
stakeholders. On behalf of the Board and
Subsidiary Boards and on my own behalf, I thank
the Chief Executive, Management and Staff for
their contribution and for their continuing
commitment and dedication.
Our stakeholders include everybody who has an
interest in the Irish Food and Drink industry and
that involves many organisations, both public and
private, together with industry representative
organisations.We work closely with all of them
and we value the contribution they make to our
work, which extends the team basis of what we
Ráiteas an
Chathaoirligh
do in a very proactive way. We also work closely
with our Ambassadors and the Irish Embassies in
overseas markets who are always there to
support and add value to our activities.
I want to thank Minister Joe Walsh for continuing
to actively support and encourage us, for
participating in our work in the marketplace
and for bringing to these activities the seal of
Ministerial commitment, notwithstanding the
onerous demands of his very busy schedule. I
would also like to thank Minister of State Noel
Treacy, Minister of State Liam Aylward, Minister
Éamon Ó Cuív (formerly Minister of State at the
Department of Agriculture and Food) and
Secretary General John Malone and the officials
of the Department of Agriculture and Food for
their valued support and contribution to
our activities.
Philip Lynch
Chairman
Annual Repor t and Financial Statements 2002
Tá áthas orm a thuairisciú go bhfuil fás i dtionscal
bhia agus dí na hÉireann linn arís in 2002. Is
comhartha é chomh maith agus atá ag éirí leis an
tionscal den teacht aniar atá i gcuideachtaí a bhíonn
ag feidhmiú i dtimpeallacht atá de shíor ag fáil níos
iomaithí.
In ainneoin roinnt fachtóirí - mar thimpeallacht
neamhchinnte eacnamaíoch, iomaíocht mhéadaithe
agus ardú airgeadra - is ábhar misnigh é a fheiceáil
go bhfuil feidhmíocht dheimhneach roinnt earnálacha
ag cothromú na ndeacrachtaí a bhí in earnálacha
eile.Táim dóchasach go bhfuil an straitéis, an
pearsanra agus na seirbhísí ag an mBord Bia chun
cabhrú le cuideachtaí bhia agus dí na hÉireann a
gcuspóirí fáis a bhaint amach.
Ag féachaint chun cinn, leanann an margadh de
bheith ag athrú agus ag éabhlú go mear agus
cothaíonn sé sin go leor dúshláin do chuideachtaí
Éireannacha.Tá leibhéil níos airde d’idirnáisiúnú
tagtha sa trádáil grósaera agus bíonn miondíoltóirí
ag féachaint thar sáile chun fás a dhéanamh mar
gheall ar choinníollacha teoranta an mhargaidh baile.
Cothaíonn an méadú atá tagtha ar shiopaí lascaine ar
fud na hEorpa, agus ní in Éirinn amháin, dúshláin nua
do mhiondíoltóirí agus do sholáthróirí
seanbhunaithe. Leanann miondíoltóirí de bheith ag
comhdhlúthú agus ag déanamh iarrachtaí níos mó
chun na costais a bhaint amach as an slabhra
soláthair. Sa bhliain 2002 chonaiceamar tabhairt
isteach praghsáil gheata na monarchan mar an
tionscnamh slabhra soláthair is déanaí.
De bharr an Euro tá praghsáil ar fud na hEorpa níos
trédhearcaí agus mar thoradh air sin is léir
míshástacht i measc tomhaltóirí maidir le
héagsúlachtaí praghasanna a shonraítear trasna na
margaí. De bharr an airgeadra aonair tá fás tagtha ar
fhoinsiú pan Eorpach ag miondíoltóirí móra
Eorpacha agus i roinnt catagóirí tá spriocdhíriú
ionsaitheach ar mhargadh na Ríochta Aontaithe
déanta ag déantúsóirí móra atá bunaithe ar an mór-
roin. Sa Bhreatain, tá
leibhéal aitheantais atá
inchomparáide le go
leor brandaí den scoth
forbartha ag brandaí
miondíolta.
Tá miondíoltóirí, ar an
tslí seo agus ar bhealaí
eile, ag freagairt do
thomhaltóir a bhíonn
ag éileamh níos mó.Tá
an t-éileamh ar an
gcatagóir Bia le hImeacht ag fás go leanúnach agus
feicimid miondíoltóirí móra ag filleadh ar an earnáil
miondíolta áise ar na Príomhshráideanna go háirithe
sa Bhreatain.
Tá Bord Bia ag leanúint na bhforbairtí seo sa
mhargadh agus ag freagairt dá réir.Tá straitéis nua
mairteola, dar teideal Dúshláin Nua Deiseanna
Nua - Margú Mhairteoil na hÉireann 2003 - 2007,
forbartha agus cothaíonn sé tosaíochtaí lárnacha
margaidh agus fógraíochta do dhul chun cinn. Sna
hearnálacha bia agus dí tomhaltóra, is é ár straitéis
ná raon de sheirbhísí sainoiriúnaithe a chur ar fáil
chun freastal ar riachtanais aonair raon éagsúil
cuideachtaí agus táirgí a chomhdhéanann an
earnáil seo. Maidir le Gnólachtaí Beaga, tá sochar á
bhaint as deiseanna lárnacha le clár saindírithe a
bheith á chur i bhfeidhm i margaí na hÉireann agus
na Breataine.
Is buntáistí lárnacha iomaitheachta do chuideachtaí
Éireannacha iad solúbthacht, nuálacht agus luas
freagartha sa timpeallacht reatha.Táim dóchasach go
bhfuil an Bord Bia ag freagairt do na dúshláin sa
mhargadh agus ag oibriú lena chinntiú go bhfuil a
acmhainní leithdháilte chun toradh uasta ar
infheistíocht a sheachadadh agus chun forbairt
margaidh, cur chun cinn agus seirbhísí eolais
éifeachtacha agus nuálacha a sholáthar. Chun go
leanfar de bheith á dhéanamh seo go héifeachtúil
Annual Repor t and Financial Statements 2002
5
Ráiteas an
Chathaoirligh
agus lena chinntiú go bhfeidhmíonn an eagraíocht ag
leibhéal sárchleachtais agus go mbíonn sí ina
ceannaire margaidh ina réimse, caithfidh sí a bheith
tiomanta don athrú. Caithfidh sí Bord agus Foireann
a bheith aici a mbeidh ar a gcumas cultúr an
athraithe a lárnú agus dlús a chur faoi
fhuinniúlacht an athraithe atá riachtanach d’fhás agus
do rathúlacht. Creidim go bhfuil Bord agus Foireann
den sórt sin againn. Chomh fada agus a leanaimid de
bheith ag tabhairt an mheascáin cheart fuinnimh
agus an fhís straitéiseach le chéile, agus a bheith á
dtreorú, ansin leanfaimid de bheith ag cur ár
gcuspóir i ngníomh agus ag seachadadh luach dár
bpáirtithe leasmhara.
6
Ba bhliain rathúil eile a bhí inti agus táim sásta arís
eile aird a tharraingt ar ár ndul chun cinn agus ár
n-éachtaí agus buíochas a ghlacadh leis na daoine
laistigh agus lasmuigh den eagraíocht ba chúis lena
gcur i ngníomh.Tá rialáil agus faomhadh treorach
straitéisí mar fhreagracht de chuid an Bhoird agus
táim go mór faoi chomaoin ag ionchuir as cuimse
mo chomhghleacaithe, a bhfuil meas agam ar a
dtiomantas agus a ndíograis agus ar mór liom a
dtacaíocht agus a gcomhairle.Tugann trí Bhord
Fochuideachta cúnamh don Bhord (Feoil & Beostoc,
Bia agus Deoch Tomhaltóra, agus Deimhniú
Cáilíochta). Ní amháin go ndéanann na Boird
Fochuideachta seo dualgais earnálacha le díograis
agus scil, ach le chéile tugann siad linn leathan de
thallann agus de shaineolas le chéile, a
chomhlánaíonn obair an Bhoird agus a chabhraíonn
leis an mBord Bia i bhfeidhmiú a chlár.
Cé go bhféachtar ar an Tuarascáil Bhliantúil, le ceart,
mar chuntasacht dár maoirseacht, is mór agam í
chomh maith mar dheis poiblí chun buíochas a
ghlacadh lenár bPríomhfheidhmeannach, leis an
mBainistíocht agus leis an bhFoireann. Is orthusan a
bhraitheann an Bord le bheith ina bhfíorghníomhairí
athraithe agus forbartha agus chun cuspóirí
straitéiseacha an Bhoird Bia a bhaint amach thar
“
I am confident that Bord Bia has the strategy,
personnel and services to assist Irish food and drink
companies achieve their growth objectives. ”
ceann ár bpáirtithe leasmhara ar fad.Thar ceann
Bhord na mBord Fochuideachta agus thar mo
cheann féin, glacaim buíochas le
Príomhfheidhmeannach, Bainistíocht agus Foireann
Bhord Bia as a bhfuil déanta go dtí seo acu agus as a
dtiomantas agus a ndíograis leanúnach.
Áirítear ar ár bpáirtithe leasmhara gach duine a
bhfuil leas aige nó aici i dtionscal bia agus dí na
hÉireann agus áiríonn sé sin go leor eagraíochtaí, idir
phoiblí agus phríobháideach, mar aon le
heagraíochtaí ionadaíocha an tionscail. Bímid ag obair
go dlúth leo ar fad agus is mór againn a gcuireann
siad lenár n-obair, a shíníonn an bunús foirne de gach
ndéanaimid i mbealach an-fhorghníomhach. Bímid ag
obair go dlúth freisin lenár nAmbasadóirí agus leis
na hAmbasáidí Éireannacha i margaí thar sáile a
bhíonn ansin i gcónaí chun tacaíocht a thabhairt dár
ngníomhaíochtaí agus chun luach a chur leo. Ba
mhaith liom buíochas a ghlacadh leis an Aire Joe
Walsh as leanúint de thacaíocht agus spreagadh a
thabhairt dúinn go gníomhach, as a bheith
rannpháirteach inár n-obair sa mhargadh agus as
séala thiomantas Aireachta a thabhairt do na
gníomhaíochtaí sin, in ainneon na n-éileamh mór a
bhaineann lena sceideal fíorghnóthach.
Ba mhaith liom buíochas a ghlacadh chomh maith
leis an Aire Stáit Noel Treacy, leis an Aire Stáit Liam
Aylward, leis an Aire Éamon Ó Cuív (an tAire Stáit
sa Roinn Talmhaíochta agus Bia roimhe seo) agus leis
an Ard-Rúnaí John Malone agus le hoifigigh na
Roinne Talmhaíochta agus Bia as a dtacaíocht
luachmhar agus as ar chuir siad lenár
ngníomhaíochtaí.
Philip Ó Loinsigh
An Cathaoirleach
Annual Repor t and Financial Statements 2002
Annual Repor t and Financial Statements 2002
“
Chief Executive’s
Review
Bord Bia works closely with each sector to develop
the appropriate strategies and activities required to
meet their distinct competitive challenges and
opportunities.
”
Introduction
In 2002 Irish food and drink exports reached
€6.8 billion.Year-on-year increases were achieved
across Prepared Food, Beef, Beverages and Live
Animals. Dairy, Pigmeat, Sheepmeat and
Horticulture and Cereal sectors were down on
the previous year. Bord Bia works closely with
each sector to develop the appropriate strategies
and activities required to meet their distinct
competitive challenges and opportunities.
In meat, beef exports grew by over 31%.
However, pigmeat exports were down 2% and
sheepmeat fell by 38%. Live exports were up 81%.
Dairy product exports declined by over 16%
following a year of historically low dairy prices
and poor global demand. Beverages grew by 7.5%
and prepared foods continued its growth curve
on the back of demand for convenience products.
Bord Bia introduced a number of initiatives
across its key service areas of information, market
development and promotion in 2002 to assist
companies compete in a fast changing and
competitive environment. A selection of these
initiatives are highlighted below.
place to assist the industry address these issues. It
is envisaged that over the five-year period the
industry will need to increase its sales to
continental EU markets by 70%.
Functional Foods
With the global value of functional foods market
estimated at close to €40 billion and the
accepted need of Irish ingredients companies to
concentrate on research and development and
movement up the value added chain, Bord Bia
undertook an information based programme in
functional foods at a launch in April 2002 through
a seminar entitled “Ingredients for Success”. Bord
Bia presented an exploratory paper on functional
foods to forty representatives from Irish industry.
The main purpose of the exploratory paper was
to get reaction to and input from the ingredients
industry with a view to initiating original research
that will assist companies in developing relevant
strategies for the future. Information was
supported by participation at two important
sector specific trade fairs; IFI in California and
Health Ingredients in Cologne.
Highlights
New Challenges – New Opportunities
Bord Bia published its new five-year Beef Strategy
2003-2007. It identified three key strategic issues.
Firstly, the industry should increase market reach,
broadening its customer base in the wake of the
contraction of markets that ensued from
successive BSE crises. Secondly, it should improve
its market position by targeting the higher
returning segments in its chosen markets.
Finally, it needs to build a brand image that can
deliver enhanced customer value and higher
market returns. New programmes are now in
Annual Repor t and Financial Statements 2002
Annual Repor t and Financial Statements 2002
9
Chief Executive’s
Review
Chief Executive’s
Review
10
Féile Bia
Foodservice
Féile Bia - a celebration of quality food - is
organised by Bord Bia in conjunction with the
Restaurants Association of Ireland and the Irish
Hotels Federation. It is supported by the farming
community and Euro-Toques - the European
community of chefs.The aim of the programme
is to promote the use of quality food in the
foodservice sector in Ireland. Participating
members commit to sourcing beef, lamb, pigmeat,
chicken and eggs from recognized Quality
Assurance schemes and identify the country of
origin of these quality products on their menus. A
major initiative was undertaken to extend Féile
Bia membership numbers and the total number of
participating hotels, restaurants and pubs has now
grown to over one thousand.
2002 saw Bord Bia introduce a new method of
effective targeting of UK foodservice buyers.
Analysis of the market combined with company
feedback identified the Pubs and Restaurant
sector in the UK as a potential target for Irish
manufacturers. Original research has been
undertaken in this sector on the ‘customer’s
customer’ to build the case for Irish companies
to introduce new products and add value to
existing relationships through increased
knowledge and understanding of this market.
The UK Foodservice market is now estimated to
be worth £33 billion. It continues to expand
based on strong consumer demand and new
distribution efficiencies borrowed from the
retail sector.
Brand Forum
Ireland The Food Island
The Brand Forum was established in 2001, and
membership reached 80 companies in 2002.The
Forum meets on a quarterly basis and the mix of
practical case studies from the industry and
expert presentations on brand marketing themes
has proved a successful formula.The large
attendances also provide an unrivalled medium
for networking. Membership and attendance is
confined to food and drink companies.The Brand
Programme is implemented with advice and
direction from a steering group of companies.The
objective is to promote and develop brands as a
route-to-market offering higher margins and
direct relationships with consumers.
The objectives of the Ireland The Food Island
umbrella brand are to improve the awareness and
image of Ireland as a food and drink producer
and to foster the opinion that Irish origin equates
with quality, naturalness and premium products.
In 2002 Bord Bia launched an integrated trade
communications campaign across a number of
product - market sectors.The campaign used
people working in the industry to communicate
key messages in relation to food safety, quality
control, traceability and taste.The campaign mix
included trade show participation, direct mail,
trade advertising and consumer promotions.
Foodservice
2002 saw Bord Bia introduce a new method of
effective targeting of UK foodservice buyers.
Analysis of the market combined with company
feedback identified the Pubs and Restaurant
Bord Bia supported two sponsorships in 2002,
The Ireland The Food Island Champion Stakes and
the 2006 Ryder Cup. Both sponsorships
provide a cost effective vehicle for reaching a
global audience and meet specific criteria of
Bord Bia’s sponsorship policy including building
awareness of Ireland as the “Food Island” and
providing trade relationship building opportunities
for Irish companies.
Marketing Finance
One hundred and thirteen companies applied for
Bord Bia’s grant schemes with seventy companies
receiving grants to the value of €813,000 in
2002.Two marketing assistance programmes, open
to SME food and drink companies, continued
throughout the year.The Marketing Improvement
Assistance Programme (MIAP) provides financial
assistance to companies involved with particular
agricultural products.These are chilled dairy
products, bio-yogurts, garlic butter spreads,
farmhouse cheeses, honey, calcified seaweed, food
ingredients, prepared meals, jams and preserves,
charcuterie and edible horticulture.The Marketing
Participation Programme (MPP) assists
companies, which manufacture and market other
food and drink products, and include foods such
as chocolates, confectionery, sauces and
alcoholic drinks.
Kinsale
Over 200 buyers from the UK, Germany,The
Netherlands, Italy, France, Spain, the USA and
Ireland with a combined purchasing power of
over €5 billion, attended Bord Bia’s Second
International Speciality Food Symposium in
Kinsale in April 2002.The event included a
Symposium with 10 internationally renowned
speakers, combined with a series of Masterclasses
in Consumer Insight.The event incorporated a
purpose built street marketplace, with over 180
Irish speciality food producers participating.The
event had a North-South dimension, with a
number of companies from Northern Ireland
participating for the first time.
Beef in Britain
Irish Beef reported record sales in the UK
market in 2002.With total exports of fresh,
frozen & processed beef at 245,000 tonnes, the
UK was Irelands most important export market
for beef.The high value retail sector, a key target,
has seen further growth.The top selling multiples
now regularly stock Irish beef under the Irish
beef logo. Irish beef is now an approved
ingredient in retail branded and own brand ready
meals. 2002 saw the introduction of Irish beef in
premium ranges and also highlighted on
restaurant menus.
The promotional focus was a major on-pack
competition - "King of the Castle".This
competition was run throughout the major
multiple retailers of Irish beef in March 2002
and was featured on over two million Irish beef
packages.The main prize was a trip to Ireland.
In-store tastings and recipe features in retailer
magazines backed this promotional activity.
French Quality Beef Certification CQC
Irish beef, certified under Bord Bia’s Beef Quality
Assurance Scheme, was the first non-French
product certified with the prestigious Critères
Qualités Certifiés (CQC) product certification.
Prime Irish steer/heifer beef can now display the
CQC logo in the French market. This logo can
Annual Repor t and Financial Statements 2002
11
Chief Executive’s
Review
be used on product to denote that it conforms
to certain specified quality characteristics.The
decision of the French authorities will enable Irish
beef to compete more effectively on the French
market and will facilitate the return of Irish beef
into the French retail sector.
Consumer Food & Drink
12
Following the investment of additional resources
and people in the consumer foods, dairy, drinks
and ingredients division of Bord Bia (CFD) in
2001, the focus in 2002 was on working with
companies to match their capabilities with market
opportunities in Britain, Continental Europe and
the USA. Bord Bia’s strategic approach to
working with companies in these sectors was to
combine knowledge of the industry with deeper
market insights in order to identify relevant
market opportunities. In 2002 a number of
customised services were introduced and
extended to assist individual companies.The "Gap
Analysis" service, extended to the French and
Swedish markets, provided a consumer led
approach delivering category solutions to the
buyer and aimed at meeting consumer needs. A
"Key Account Management" service was
introduced.This tailored service assisted
companies formally plan for growth once a listing
was secured. A new "Brand Design" service is
aimed at assisting companies in the development
of new pack designs to improve shelf impact and
stand out.
Chief Executive’s
Review
Food Centre
The new Food Centre is a multi-functional facility
that enables Bord Bia to conduct seminars,
briefings, presentations, demonstrations and
hospitality events that would otherwise have to
be carried out less efficiently away from Bord
Bia’s headquarters. It has been designed for
maximum flexibility so that it can convert quickly
to whatever usage is required. It is an important
resource in Bord Bia’s promotional programme
and it provides a setting where Irish food and
drink can be presented in accordance with the
highest international culinary standards. It
incorporates the latest audiovisual technology
and, most importantly, has been designed to
maximise energy efficiency. In this regard, we are
pleased to acknowledge the support of
Sustainable Energy Ireland, which is very much
appreciated.The Food Centre is of course a
member of the Féile Bia scheme.
Exhibitions and Demonstrations
Bord Bia’s new look exhibition stand came on
stream for the first time at CIBUS, the Italian
flagship trade event in April.The trend in
international exhibitions is away from large
national areas towards smaller sectoral
presentations while Bord Bia’s own marketing
programmes are now focusing on medium and
small sectoral shows.The new trade advertising
campaign using people from the industry to
promote the capability of Irish food and drink
companies was integrated into the stand design
to provide a leading edge platform for the new
branding. Bord Bia participated at 19 exhibitions
during 2002 five of which were first time trade
fairs for Bord Bia; these included ProWein,Wine
and Spirits Exhibition, Düsseldorf; IFT, Food
Ingredients Show, US market; HiEurope, Health
Food Ingredients, Paris;TFWA, Duty Free Retail
Sector and Slow Food in Italy for the speciality
food industry. Over seventy Irish companies
exhibited under the Ireland The Food Island
umbrella brand throughout the year.
Pigmeat Promotion
On the domestic market, communications and
media campaigns were launched to promote an
increased consumer awareness of pork and bacon
produced under the Quality Assurance Scheme.
A series of in-store tastings were held to
promote pork shoulder strips and diced shoulder.
A total of 232 days of tastings took place in 125
retail outlets nationwide.This work was further
highlighted through the work of Bord Bia’s team
of regional demonstrators and by the work of the
new Food Centre.The main focus of Bord Bia’s
activities in the UK was on improving access of
Irish pigmeat to the multiple retailers. A new
"Irish Pork" logo was launched in one of the top
multiples. Promotions were focused around St.
Patrick’s Day and were very well received by
consumers. Inward buyer itineraries were also
coordinated to generate new business.
Information Services
Two senior business analysts joined Information
Services in 2002.These staff will publish original
research and bring emerging consumer and
market developments to the attention of the food
and drink industry.
In developing Bord Bia’s IT capability to industry,
an Enterprise Portal was developed on a trial
pilot basis in 2002.This Extranet allows client
companies access via the World Wide Web to
Bord Bia resources and customised content.
Key features in the initial implementation included
major reports, discussion forums, conference
reviews, report reviews,
eAlerts, related links
and a personnel
directory. Also
piloted was a
‘Producer Portal’
that will effectively be
an online version of
the existing weekly
Market Monitor publication
for meat.The same information is
available based on subscriptions for
each species and is available to users virtually
instantaneously rather than the four or five days
that the conventional print and postal cycle
requires.
Work commenced in 2002 on new research on
the market for organics in Ireland and research
into the associations that selected European
consumers have with Ireland.This research will be
published in 2003.
Quality Assurance
In 2002 Bord Bia’s Quality Assurance activities
continued to expand.Work on the development
of Quality Assurance Schemes for both poultry
and lamb was completed.Work was completed
in revising the Beef Quality Assurance Scheme to
bring it into line with the requirements of the
Benchmark Standard EN45011.This involved the
establishment of a specialist Technical Advisory
Committee (TAC) and two sub committees.
The revised standard was submitted to the
National Accreditation Board (NAB) at year-end.
Separately the Egg Quality Assurance Scheme
which had been submitted to NAB the previous
year was approved. Bord Bia itself was awarded
EN45011 Accreditation Body status by NAB for
the scope of the egg scheme.
Annual Repor t and Financial Statements 2002
13
Chief Executive’s
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Chief Executive’s
Review
In the UK, 33 speciality food companies were
featured in a joint North-South Irish food
promotion in Harrods Food Hall in London in
March 2002. This resulted in a number of
companies obtaining permanent listing with this
internationally renowned store.
Home Market Promotion
North and South Programme
14
Invest Northern Ireland and Bord Bia came
together to stage a number of joint North-South
activities during the year. Sixteen companies, from
both sides of the border participated in a US
market investigation visit to Philadelphia in May,
where they had a three-day workshop on
emerging trends in the food and drink market.
The itinerary included a visit to the National
Restaurant Association show in Chicago and a
series of presentations from leading US
consultants on the changing characteristics of the
foodservice market in the United States.
An Ireland stand at the Fancy Food Fair in New
York was jointly organised by Bord Bia and Invest
Northern Ireland. Eight companies participated
with individual stands and products from a total
of 36 speciality food companies were displayed.
The event was run in conjunction with a trade
reception for key retail and foodservice buyers in
the New York region.
On the domestic market the promotion of beef
centred on a new EU-funded beef information
programme, which included the distribution of
consumer information materials; an educational
programme for consumers, students and health
professionals; the launch of a new beef website;
and a computer based "Meat Resource Pack" for
secondary school students. Additionally, a
number of information and promotional events
were co-ordinated during the year, including
Regional Farmers’ Seminars, Meat Industry
Seminars, Quality Beef Producer Awards and
participation at the National Ploughing
Championships.
Last year Bord Bia produced a Lifestyle Pack
entitled “It's all about healthy eating”, which
comprises four leaflets on healthy eating.These
leaflets focused on sports nutrition, cholesterol,
slimming and a healthy diet for people on the go.
The cholesterol leaflet is endorsed by the Irish
Heart Foundation.Two additional leaflets were
also produced under the European Quality Beef
information campaign. “Cholesterol and Beef”
highlights the role of lean red meat in a healthy
heart diet, “Focus on Fitness” outlines ways to
improve your fitness even if you are not the
sporting type. Bord Bia in association with the
Irish Egg Association developed “Eggs: the healthy
choice” outlining why eggs can be included in a
cholesterol lowering diet.Two versions of the
leaflet were produced - a four-page leaflet for
Annual Repor t and Financial Statements 2002
consumers and a more detailed, eight-page
version for health professionals.
Management system, whereby individual personal
objectives are linked to Bord Bia’s strategic
objectives.
Business Performance Management
Bord Bia developed a Business Performance
Management system in 2001 to monitor progress
in achievement of its strategy. Business
Performance Management (BPM) is an ongoing
process of defining, measuring, improving and
sustaining performance. It is a comprehensive
management process linking strategy, resources
and processes using performance data to drive
performance improvement. Key and Business
Performance Indicators have been developed
to measure performance across the organisation.
These indicators are aligned with the
organisation’s strategic objectives and enable
performance measurement on a corporate level
(KPI’s) and on an operational level across sectors
and business units (BPI’s).
In 2002 BPM was successfully implemented in
Bord Bia. A BPM system has been developed to
facilitate capture of BPM data electronically on a
quarterly basis and to permit easy reporting from
data captured. Following a mid-year review of
BPM, additional BPI’s were developed to ensure
that all key organisational activities are measured.
Surveys of Bord Bia clients, customers and staff
were conducted as part of the Business
Performance Management Initiative and the
results of these surveys have been incorporated
into the end-of-year performance report. BPM is
integrated with the People Performance
This ensures that performance indicators are
cascaded down to the individual level within the
organisation and creates an holistic model of
organisational strategy, which enables all staff to
see how their individual activities contribute to
achieving the overall strategy.
15
Chief Executive’s
Review
Beef
16
The volume of beef produced in Ireland during
2002 declined by almost 8% or 43,000 tonnes
on 2001 levels. Most of this decline was due to
a drop in cattle supplies, while the lower carcase
weights prevailing for most of the year also
impacted on volumes produced. Irish beef
exports were valued at €1.2 billion in 2002 and
represented an increase of 31% on 2001 levels.
During 2001, an estimated 160,000 tonnes or
28% of Irish beef production was placed into the
various market support schemes introduced by
the EU in the aftermath of the October 2000
BSE crisis on the Continent. For 2002, the
volume of beef exported increased by 29% to
445,000 tonnes.The commercial markets for Irish
beef recovered significantly during the course of
2002 as EU beef consumption recovered to
within 3% of 1999 levels.
The decline in meat plant cattle supplies during
the year was largely due to a fall of almost
120,000 head or 11% in male cattle disposals as
a result of strong live exports of calves and
weanlings for most of 2000 and a move towards
younger finishing of cattle by producers.
This drop was partially offset by an increase in
heifer supplies of 11%. Overall, prime cattle
supplies at export meat plants fell by 5% in 2002
to reach 1.32 million head.
The UK continued to be the principal outlet for
Irish beef during 2002 as the ongoing impact of
Foot and Mouth on domestic production resulted
in import demand increasing by a further 5%. Irish
exports to the UK are estimated to have
increased by around 11% to 245,000 tonnes.
“
a 42% decline in 2001. One of the main
continental EU markets for Irish beef during the
year was Holland with exports of 30,000 tonnes,
compared to 26,000 tonnes in 2001.The Italian
market showed strong recovery for prime beef
in 2002 with exports reaching 22,000 tonnes
compared with 11,000 tonnes a year earlier.
Exports to Scandinavia more than doubled with
volumes increasing from 13,000 tonnes in 2001
to 30,000 tonnes in 2002.The French market
continues to be slower to recover with volumes
rising from 13,000 tonnes to an estimated 16,000
tonnes in 2002.
The majority of traditional international markets
for EU beef remained closed as a result of BSE
and although the Egyptian market is officially open
to Irish beef, no significant trade has taken place
to date.The Russian market remains the only key
international market currently importing EU beef.
Irish exports to Russia for the year are estimated
to have reached 83,000 tonnes, an increase of
40,000 tonnes or 93%. Overall exports to
international markets amounted to 89,000 tonnes
in 2002, compared to 53,000 tonnes in 2001.
On the home market the promotion of beef
centred on a new EU funded beef information
programme, which included the distribution of
consumer information materials; an educational
programme for consumers, students and health
professionals; the launch of a new beef website;
and a computer based "Meat Resource Pack" for
secondary school students. Bord Bia coordinated
a number of events in 2002, including Regional
Farmers’ Seminars, Meat Industry Seminars,
Quality Beef Producer Awards and participation
at the National Ploughing Championships.
Exports to Continental EU markets underwent a
sustained recovery during most of 2002 following
Annual Repor t and Financial Statements 2002
Irish beef exports were valued at €1.2 billion in
2002 and represented an increase of 31% on 2001
levels. ”
Chief Executive’s
Review
Bord Bia’s activities in the UK during 2002
focused on further increasing sales of Irish beef
and the penetration of the "Irish Beef" logo in the
top seven retail multiples.Trade and consumer
advertising and promotional campaigns, such as
in-store tastings and consumer competitions,
were undertaken to further develop awareness
of the Irish Beef label.
In continental Europe, Bord Bia worked with the
Irish trade and customers to develop strategies
and initiatives, where appropriate, to re-establish
sales of Irish beef.This involved retail promotions
in Holland, France, Spain, Belgium and Italy. Inward
Buyer itineraries were organised for retail and
wholesale beef buyers from all major European
markets.
18
Irish beef, certified under Bord Bia’s Beef Quality
Assurance Scheme, became the first non-French
product to be conferred with the prestigious
Critères Qualites Certifiés (CQC) product
certification. Prime Irish steer/heifer beef can now
display the CQC logo in the French market. In
addition there was a strong representation of all
meat products at the SIAL exhibition in Paris.
In international markets, Bord Bia
undertook a number
of activities in
support of the
Department of
Agriculture &
Food’s efforts
to re-open key
international
markets. Bord
Bia continued to
coordinate the
operation of the
Chief Executive’s
Review
Russian Veterinary Service in Ireland on behalf of
the beef and pork sectors.
Live Animals
Exports of live animals were valued at €105
million during 2002, an increase of 81% on 2001
levels.The increase was due to a rise of 25% in
the number of live cattle exports to 126,000 head
and the loss in slaughtering capacity in Ireland,
which resulted in a doubling of live pig exports to
Northern Ireland to 320,000 head.
Within the live cattle trade varying trends were
evident. Exports to the Continent increased by
30,000 head to reach 72,000 head. Spain
continued to be the principal market outlet for
Irish live cattle with exports reaching an
estimated 57,000 head compared to 32,000 in
2001. Sales of live cattle to Italy have been slower
to recover reaching an estimated 9,000 compared
to 5,000 last year. Exports to Holland at 5,000
head remain at around 10% of 2000 levels.
Exports to international markets increased by
17,000 head during 2002 to reach 28,000 head
with the Lebanon remaining the sole market
outlet. However, exports to Northern Ireland
fell by half to reach 26,000 head.
Bord Bia’s programmes in support of the
livestock trade during 2002 focused mainly on
keeping Irish 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
Irish pigmeat exports dropped in value to €270
million in 2002, a 19% fall on 2001 levels.This was
a result of a 5% drop in production levels coupled
with a 13% drop in prices.
The UK remains the principal export market for
Irish pigmeat with estimates for 2002 putting
trade marginally below 2001 levels at some
63,000 tonnes.This represents almost 50% of
total exports. Irish exports continued to be
assisted by the strength of Sterling. Stall and
tether free pigmeat continues to be in demand in
Britain and approximately 15-20% of Irish pigmeat
production has now changed to stall and tether
free to cater for this demand.
Exports of Irish pigmeat to continental Europe
markets returned to more traditional levels in
2002, as the resumption of UK pigmeat exports
combined with a preference by Irish processors
to divert supplies to newly opened international
markets led to a drop in volumes. Overall,
exports are estimated to have reached some
44,000 tonnes, which shows a fall of 10,000
tonnes on 2001, but is broadly similar to export
levels in 2000. Germany remains the principal
market at 14,000 tonnes followed by France
and Italy.
Irish exports to international markets in 2002
showed a significant recovery. Exports to key
international markets in 2002 more than doubled
to 22,000 tonnes. Russia re-opened its market to
Ireland in June 2001, followed by the re-opening
of the US market towards the end of the year. In
June 2002, Ireland also regained access to the
Japanese market. Russia remained the principal
non-EU market for Irish pigmeat in 2002 at
11,500 tonnes, double year earlier levels. Other
principal non-EU outlets for Irish pigmeat during
the year included the United States and Japan at
3,000 and 2,500 tonnes respectively.
On the home market, media campaigns were
launched to promote an increased consumer
awareness of pork and bacon produced under the
Quality Assurance Scheme. A series of in-store
tastings were held to promote pork shoulder
strips and diced shoulder. A total of 232 days of
tastings took place in 125 retail outlets
nationwide.
These promotions were further enhanced
through the ongoing work of Bord Bia’s team of
regional demonstrators and its new Food Centre
in Dublin.
The main focus of Bord Bia’s activities in the UK
was on improving access of Irish pigmeat to the
multiple retailers. Inward buyer itineraries were
also coordinated to generate new business.
In continental EU markets, Bord Bia’s activities
were primarily concentrated on Germany,
Holland and Italy. Activities focused on
information, trade liaison and buyer-supplier
events, with the aim of securing new buyers for
Irish pigmeat, as well as regaining contact with
those lost during the Foot and Mouth crisis.
Annual Repor t and Financial Statements 2002
19
Chief Executive’s
Review
In international markets, activities consisted of
working with the Department of Agriculture &
Food to secure the re-opening of key
international markets, such as Japan. Bord Bia
organised a reception in Japan during the World
Cup, which was attended by key representatives
of the Irish and Japanese pigmeat industry. Russia
also remained a focus and Bord Bia exhibited at
World Food Moscow in September 2002.
Lamb
20
The value of Irish sheepmeat exports fell by 38%
during 2002 to €160 million.This decline was due
to a combination of a fall of 17% in supplies
combined with a 14% price reduction.The
domestic market continues to account for a
greater share of sheep output with estimates for
2002 putting the figure at over 40%. Despite the
decline in producer prices during the year they
still remained some 21% or 65c/kg ahead of pre
Foot and Mouth levels.
Irish sheepmeat exports to France in 2002
amounted to 31,000 tonnes, a decline of almost
28%. Exports to the UK were maintained at 3,000
tonnes while exports to Germany and the
Mediterranean eased on 2001 levels, reflecting the
resumption of UK sheepmeat exports following
the Foot and Mouth related restrictions of 2001.
“
France is Ireland’s most important export
destination for lamb. Bord Bia’s activities in
France included the continued development of
Irish lamb identification in retail outlets, under the
"L’Agneau de la St. Jean" label, with three of the
top five retail groups taking part in the campaign.
Other activities involved ongoing trade liaison and
marketing initiatives with key French customers.
Poultry
Bord Bia coordinated a poultry industry
conference, in association with the Irish poultry
and egg industry at the Hodson Bay Hotel,
Athlone. Issues ranging from food safety and
quality assurance, to trade developments and
marketing strategies for poultry and eggs were
discussed. Bord Bia developed a Chicken Quality
Assurance Scheme to meet the specific needs of
the broiler sector which will be implemented at
both farm and processing level.The scheme is the
most all-embracing of its type internationally and
is a comprehensive industry response to
consumers quality concerns.Test audits and
producer and auditor training will be conducted
prior to farm inspections. Implementation of the
scheme will commence in 2003.
Broadening the consumer appeal for lamb was
the principal objective on the domestic market in
2002. A combination of TV, radio and print media
advertising was used throughout the spring and
summer months. Other activities included
cookery demonstrations and a lamb educational
programme, which promoted lamb recipes and
provided information on buying, storing and
cooking lamb.
Annual Repor t and Financial Statements 2002
France is Ireland’s most important export
destination for lamb.”
“
Chief Executive’s
Review
The sector is characterised by a diverse range of
companies operating across a number of
categories including chilled, frozen, ambient
grocery and confectionery. ”
Prepared Consumer Foods
The prepared consumer foods sector continued
to show dynamic development during 2002 and
an increase in export sales. Accounting for a total
of 26% of Irish food and drink exports, this makes
the prepared consumer foods sector the second
largest single sector of the Irish food and drink
industry.
The sector is characterised by a diverse range of
companies operating across a number of
categories including chilled, frozen, ambient
grocery and confectionery.The sector is typically
dominated by small to medium size
manufacturers operating in different channels (e.g.
foodservice, co-packing, supply to manufacturing
and retail) and many different export markets.
Despite a number of challenges in the main
export markets such as intensifying competition,
retail consolidation and stagnant retail sales, the
sector continues to show growth outpacing that
of other sectors of the industry.The UK is the
predominant export market for prepared foods
with growth of just under 10% being secured in
this market during 2002. Key successes in this,
and other markets, were secured through the
development and supply of innovative products
in categories such as confectionery, hand held
snacks, ready meals, condiments, pizzas and “Food
to Go” type products both as brands and through
own label supply.
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 2002.The conference provided
market information and insight on retailer and
foodservice trends in Ireland, the UK and
continental Europe. It also provided research on
both Irish and UK consumers’ attitudes towards
convenience foods. An additional feature of the
conference was the 180 meetings between
companies and Bord Bia’s trade marketing
specialists.
Bord Bia continued to work in partnership with
the sector during 2002 through the provision of
dedicated programmes and customised services
tailored to assist companies secure new business
and retain existing listings in the market. One of
the key services provided to Irish suppliers during
2002 was the Gap Analysis service.This service is
a consumer led approach, providing category
solutions to the buyer, aimed at meeting
consumer needs more effectively.The Gap
Analysis service is now joined by a Brand Design
Service, a Brand Audit Service and a Key Account
Management Service.
Other initiatives undertaken in the market during
2002 included the introduction of branded Irish
fixtures in retail multiples in Britain, specifically
targeting the Irish population living within the
area of these stores.This initiative has been
greatly facilitated by the growing interest by the
major multiples to better cater for the needs of
the local consumer. Bord Bia has strongly
supported this initiative through in-store tastings,
point-of-sale and a range of communications
initiatives designed to raise awareness at
consumer level about Irish brands. In addition, the
foodservice programme in the UK targeted the
pub and retail market identifying new market
opportunities for Irish suppliers.
Having identified the growth in the Convenience
Retail Market in the UK during 2002, a sector
that now accounts for over a fifth of all retail
Annual Repor t and Financial Statements 2002
23
Chief Executive’s
Review
24
Chief Executive’s
Review
sales and is currently valued at €32 billion, Bord
Bia dedicated resources to researching this sector
during 2002. An in-depth report on this market
channel was produced giving an overview of the
sector, and profiling the major distributors,
wholesalers and retailers operating within this
dynamic sector of the British retail market. Bord
Bia also commenced a programme of one-to-one
meetings with the major players during the latter
half of 2002.
undertaken. Bord Bia carried out customised
work on behalf of clients in these and other
markets including Spain, Italy and Holland. In
addition Irish prepared food companies
participated at a number of sector and channel
specific trade shows including ISM
(Confectionery), IFCA (In-flight Catering
Exhibition), SIAL (a biennial international
consumer foods fair in Paris), CIBUS and
Alimentaria.
In the United States market, Bord Bia launched
the West Coast project involving seven
companies targeting premium food retail outlets
on the West Coast.The promotion campaign
included media communications, trade buyer
presentations and in-store merchandising and
promotion. In addition, Bord Bia coordinated
a visit by the global buying arm of Wal-Mart to
meet potential Irish suppliers in Dublin.
This was followed up by presentations at
Wal-Mart’s European base in Germany and their
headquarters in the United States.
Bord Bia also provided a range of market
intelligence and information during 2002 to
improve market awareness and key account
strategy understanding.These included seminars,
retail market reports and conference reports.
The development of sales into Continental
Europe is still a challenge, but continues to
remain an important medium term strategic
objective. Exports to the continent were up
during 2002 with growth in both the German and
French markets.
In 2002, Bord Bia services for the sector focused
on information provision and market
development through buyer contact. Retail
programmes were carried out in both
France and Sweden, resulting in
ongoing discussion between Irish
suppliers, retailers and
distributors. Market study visits
to France and Germany were
Dairy and Food Ingredients
The year 2002 was one of historically low prices,
with poor global demand for dairy products and
ingredients.The lack of confidence in the world
economy, which resulted in the necessity to
support the industry through intervention, left
Irish dairy exports for the year valued at
€1,455m, a 16.6% decrease over the year 2001.
Throughout 2002 the prices achieved for
commodity dairy products and ingredients were
generally very low compared to the very positive
trends in 2000.This was also the case for Irish
products.This situation affected all producers and
was true of all markets during the year.
Little trading in products such as skim milk
powder (SMP) or butter took place for much of
the season as uncertainties over world economic
prospects kept buying activity cautious and at low
volume levels regardless of source of supply. As
there was little upward movement and variation
in prices and demand across product categories,
output also varied considerably in 2002. In key
markets, weak demand coupled with economic
slowdown resulted in large stock surpluses of
cheese and casein early in the year. Within the
EU, cheese production slowed down as a
consequence of lower than expected growth in
cheese consumption and recovery in meat
consumption. Irish cheese prices were not as
strong in the first three quarters of 2002, as they
had been in 2001, an exceptional year by any
standards. Concern over high levels of cheese
production and stocks, and a lowering in demand
resulted in a lowering of prices throughout the
year. There was some improvement in prices as
export demand increased and milk output was
diverted into the production of butter and SMP in
the second half of 2002.
Within the EU, the increase in production of
butter and SMP, with low prices and weak
demand, resulted in high volumes of intervention
sales for both products. However, during the
latter half of 2002, prices showed some
improvement as export demand increased
slightly, slowing sales into intervention.With the
emphasis on the increasing move to higher value
added ingredient production, Bord Bia started its
Ingredients Programme 2002 with the Functional
Foods Seminar in April.This was the platform
for the phase one exploratory paper on the area
from which original research was initiated by
Bord Bia for completion and presentation to the
industry in 2003.
Bord Bia piloted participation at two new
trade exhibitions in 2002 in support of market
investigation and development. Participation at
these two shows - IFT in California and Health
Ingredients Europe in Cologne - was supported
by targeted industry “capability” advertising in
selected trade journals.
In 2003, Bord Bia will
focus on the provision
of information and
market development
opportunities in the
higher value added
health, nutrition and
wellbeing segments of
the ingredients
industry.
Beverages
The Irish alcoholic
drinks sector is a major
contributor to the Irish economy, employing
approximately six thousand people and with a
gross output in excess of €3bn. Exports of
beverages account for 14% of total overall
exports of Irish food and drink products.
In terms of export markets, Irish drinks products
are exported across the globe with many of the
well-known beer, liqueur and whiskey brands
widely available. 2002 was a very successful year
for the industry with total exports now
approaching €1 billion. Despite a depressed
consumer market, the industry does not appear
to have had suffered a negative effect in 2002.
Products showing particular growth during the
year included cream liqueurs, malt beer
and whiskey.
Indigenous companies continued to show good
growth in their key export markets especially the
UK, USA and Continental Europe. Opportunities
going forward exist for companies prepared to
offer customers new and innovative product
design, packaging and flavour options.
Annual Repor t and Financial Statements 2002
25
Chief Executive’s
Review
Chief Executive’s
Review
time on a pilot basis - Prowein, Düsseldorf and
Tax Free World Association, Cannes.
Bord Bia organised the Irish participation at the
London International Wine & Spirits Fair and
Wine & Spirit Wholesalers of America (WSWA)
in Orlando, USA.
Five companies participated on a market study
visit to Australia in September to assess the
potential of the market and meet with importers
and distributors and other contacts.
The continuous upheaval within the industry
during the past five years due to mergers,
acquisitions and company reorganisations, had an
effect on the structure and profile of the business
in 2002 and will continue to do so for the short
to medium term.
26
The UK remained the largest overall market for
Irish beverage products. However, suppliers
came under pressure from UK retailers as they
continued to look at non-food opportunities in
their stores.This impacted on the availability
of shelf facings and space.This was especially
difficult for companies who launched new
products on the market.The US market
continued to be a key focus for the industry
and remained a market with huge potential.
Even though it experienced a slight slowdown
in the past 12 months, companies continued to
work in developing this market for the future.
Irish companies involved in the alcoholic drinks
sector attended key international drinks sector
trade shows to introduce themselves to new
customers, launch new products and meet with
existing customers. During 2002, Bord Bia
assisted companies in the sector by organising
participation at four international drinks trade
shows.Two shows were attended for the first
Small Business & Speciality Foods
Small Business continued its focus on UK and
Irish markets to consolidate existing business
with multiple retail accounts, extending the reach
of speciality foods into independent trade and
regional multiples. It is estimated that speciality
food shoppers in the target markets of Ireland
and the UK spend around €6.1 billion on
speciality foods.The speciality foods business in
Ireland has an estimated turnover of
€450 million.
A programme of retailer briefings to develop and
enhance relationships between the trade and
small food producers was organised by Bord Bia.
The format was effective in providing a platform
for small food producers to meet buyers and to
understand at first hand, the requirements of
supplying the retail trade. Representatives from
over one hundred small food businesses attended
the events throughout the year, which were
followed by a number of retail open days, with
organised store visits incorporating presentations
on trading strategies and supplying into central
distribution.
Gaining access to distribution continues to be a
key success factor for small and speciality food
Annual Repor t and Financial Statements 2002
businesses. Bord Bia put together a marketing
programme to work more closely with
intermediaries to improve awareness of the
role and importance of distributors in Ireland.
A new Distributor Directory was published,
profiling the main food and drink distributors
in Ireland.
Bord Bia, for the first time, participated at
Salone del Gusto - the world’s biggest speciality
food event - in Italy. Nine Irish speciality food
companies presented their products on the
‘Ireland The Food Island’ stand.The event
attracted key speciality trade buyers, international
chefs and opinion formers from around
the world.
Edible Horticulture
The year 2002 proved to be a difficult one for
the edible horticulture sector.This is evident in
the drop in the value of exports to
approximately €200m in 2002. Employment in
the sector stands at approximately 11,000, with
total production valued at €344m.
As mushroom production and marketing to the
UK retail trade dominates the entire sector, the
effect of intense price pressure in this sector
took its toll. Irish mushroom companies are
significant suppliers to the UK retail trade and
any changes in terms of price or supply have an
effect on exports from Ireland.
In tandem with the increased price pressure
from the retailers, production costs grew.
Increased activity from Dutch and Eastern
European producers, from a lower cost base,
threatened the Irish suppliers into the UK
retail market.
To assist Irish companies keep up to date on
mushroom buying patterns, by mushroom type
and retailer and trends in the UK mushroom
retail market, Bord Bia jointly funded quarterly
market information provided by Taylor Nelson
SOFRES. Companies used this data to identify
market opportunities and to assist them in
making sales presentations to retail targets.
In 2002, Bord Bia, together with Bord Glas,
agreed to jointly fund a study with the purpose
of assessing the competitiveness of the Irish
mushroom industry in the UK versus its key
competitors.The results of this study will be
used to assist the industry develop its strategic
directions in the future.
Organisation Change and
Development
Organisation change and development is, and
must be, a continuing process. Standing still is not
an option if Bord Bia is to live its values and
realise its mission, which is to "deliver effective and
innovative market development, promotion and
information services in order to secure new business
for our clients".
27
Chief Executive’s
Review
The marketplace in which Bord Bia operates is
dynamic and ever changing and Bord Bia must be
no less.This requires an efficient and
forward-looking organisation that maximises the
resources entrusted to it by its stakeholders and
that aligns personal growth with organisation
change and development. Furthermore, the work
of team building and development must be
continuous with a united approach to the
achievement of organisational goals.
28
The year 2002 saw a continued strong focus
on personnel development and training.
This included any refocusing or restructuring
required to meet new and changing demands.
Additional resources were invested in the
implementation of the Business Performance
Management System, which was completed in
2002. It will be evaluated and refined as part of
a continuous development process to ensure it
remains an important tool in the management
of the business.
The first Staff Survey, carried out by an
independent specialist agency, was conducted in
2002.This produced encouraging results showing
that Bord Bia is a team based organisation and
registering strong scores in relation to goal clarity
and definition, uniformity of vision and morale.
The Bord Bia Values developed in 2001 through
a highly participative organisation-wide process,
were implemented in 2002 and now form a key
part of the People Performance Management
System.This system enables staff members to
review their progress in living and embedding
the Values, which are central to the Bord Bia
organisation culture.
Maintaining an efficient and supportive work
environment is important to both staff and
visitors and Bord Bia continued to implement a
cost-effective maintenance and equipment
replacement programme in accordance with best
practice. In addition, in 2002, the new Food
Corporate Statement
Centre was opened.This is a multi-functional
facility that enables Bord Bia to conduct seminars,
briefings, presentations, demonstrations and
hospitality events that would otherwise have to
be carried out less efficiently away from Bord
Bia’s headquarters.
Corporate Governance was a major focus in
2002.The new Code of Corporate Governance
for State Bodies was adopted by the Board in
December 2001 and the process of embedding
it and communicating its requirements across the
organisation continued throughout 2002.
Additional resources were deployed to support
implementation, and any necessary strengthening
or complementary measures were instituted as
necessary. In November 2002, Bord Bia became
a prescribed organisation under the Freedom of
Information (FOI) Act. Prior to this, an
organisation-wide preparation and training
programme had been conducted.
In addition, an external study of Bord Bia’s
Records Management Policies & Procedures was
carried out to further strengthen Bord Bia’s
ability to respond to FOI requests efficiently and
in accordance with the statutory timeframe.
The need constantly to focus on maximising
returns from resources has been referred to.
Last year Bord Bia commissioned an external
study to review expenditure allocation and
measurement procedures and to make any
recommendations considered necessary.
This study will be carried out in 2003.
Bord Bia will continue to be open to new ways
of delivering value and of maximising returns to
its stakeholders and aims to have effective
processes in place at all times to ensure this.
Michael Duffy
Chief Executive
Annual Repor t and Financial Statements 2002
Governance
The Board adopted the Code of Practice for the Governance of State Bodies in December 2001 and
the provisions of the Code were fully implemented in 2002.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.
Ethics in Public Office
The provisions of the Ethics in Public Office Act 1995 and the Standards in Public Office Act 2001 are
being implemented.
Freedom of Information
With effect from November 2002, Bord Bia became a prescribed organisation under the Freedom of
Information Act (FOI) 1997. Prior to that it had instituted an organisation wide familiarisation and
training programme in preparation for meeting the compliance requirements of the Act, which establishes three new statutory rights:
·
A legal right for each person to access information held by public bodies;
·
A legal right for each person to have official information held by a public body, relating to
him/herself, amended where it is incomplete, incorrect, or misleading;
·
A legal right to obtain reasons for decisions affecting oneself taken by a public body.
Equality
Bord Bia is committed to ensuring equality of opportunity and its personnel and staff development
programmes are structured accordingly. Bord Bia is also committed to implementation of government
policy in relation to the employment of disabled people in the public sector. During 2002 specific
additional provisions were made for disabled visitors to Bord Bia’s Food Centre.There is a policy on
sexual harassment in operation to support and protect the dignity of each person.
Safety, Health and Welfare at Work
Bord Bia is implementing the provisions of the Safety, Health & Welfare at Work Act 1989, 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.
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
Annual Repor t and Financial Statements 2002
29
Corporate Statement
aforesaid all such special accounts as the Minister may, or at the request of the Minister for Finance
shall, from time to time direct and the Board shall ensure that separate accounts shall be kept and
presented to the Board by any Subsidiary Board that may be established by the Board under this Act
and these accounts shall be incorporated in the general statement of account of the Board."
In preparing these financial statements the Board is required to:
Corporate Statement
The Board has established processes to identify and evaluate business risks by:
·
Identifying the nature, extent and financial implication of risks facing the body including the extent
and categories which it regards as acceptable;
·
·
Assessing the likelihood of identified risks occurring;
1. Select suitable accounting policies and then apply them consistently.
2. Make judgements and estimates that are reasonable and prudent.
3. Prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Board will continue in operation.
4. State whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements.
30
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
Michael Duffy
Chief Executive
Statement on the System of Internal Financial Control
On behalf of the Board of Bord Bia, I acknowledge our responsibility for ensuring that an effective
system of internal financial control is maintained and operated.
The system can provide reasonable, but not absolute, assurance that assets are safeguarded,
transactions authorised and properly recorded, and that material errors or irregularities are either
prevented or would be detected in a timely period.
The Board has taken steps to ensure an appropriate control environment is in place by:
·
·
·
Clearly defining management responsibilities and powers;
Working closely with Government and various Agencies to ensure that there is a clear
understanding of Bord Bia goals and support for the Board’s strategies to achieve those goals.
The system of internal financial control is based on a framework of regular management information,
administration procedures including segregation of duties, and a system of delegation and accountability.
In particular it includes:
·
A comprehensive budgeting system with an annual budget which is reviewed and agreed by the
Board;
·
Regular reviews by the Board of periodic and annual financial reports which indicate financial
performance against forecasts;
·
Setting targets to measure financial and other performance.
Bord Bia has an outsourced internal audit function, which operates in accordance with the Framework
Code of Best Practice set out in the Code of Practice for the Governance of State Bodies.The work of
internal audit is informed by analysis of the risk to which the body is exposed, and annual internal audit
plans are based on this analysis.The analysis of risk and the Internal Audit plan are endorsed by the
Board Audit Committee and approved by the Board. At least annually, the Internal Auditor provides the
Board with a report of internal audit activity.The report includes the Internal Auditor’s opinion on the
adequacy and effectiveness of the system of internal financial control.
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.
It is the Board’s opinion that an effective system of internal financial control operates within
Bord Bia.This is affirmed by a review of the effectiveness of the system of internal financial controls
carried out by the Internal Auditor in respect of the year ended 31 December 2002.
On behalf of the Board
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.
Annual Repor t and Financial Statements 2002
Philip Lynch
Chairman
Annual Repor t and Financial Statements 2002
31
Meat & Livestock
Board Membership
Board Membership
Year ended 31 December 2002
Year ended 31 December 2002
Chairman
Chief Executive
Secretary
Chairman
Mr Philip Lynch
Chief Executive,
IAWS Group plc
Mr Michael Duffy
Mr Seamus Kenny
Mr Denis Lucey
Chief Executive, Dairygold
Co-Operative Society Ltd.
MEMBERS
CHANGES DURING 2002
MEMBERS
CHANGES DURING 2002
Mr Dan Brown
Managing Director, Dawn
Meats (Grannagh) Ltd.
Term Expired 25 January, 2002:
Mr Michael Dowling (re-appointed 26 January)
Mr Michael Behan
Chairman, Irish Meat Association & Managing
Director, Fair Oak Foods
Re-appointed 13 August:
Mr Sean Buckley
Ms Marian Byrne
Principal Officer, Department
of Agriculture & Food
Mr Joseph O’Sullivan (re-appointed 26 January)
Mr Denis Lucey (re-appointed 26 January)
Ms Sara White
Assistant Secretary, Department
of the Marine & Natural Resources
Mr David Callinan
Teagasc
Dr Noel Cawley
Managing Director,The Irish Dairy Board
32
Appointed 6 February:
Mr David Callinan
Mr John Dillon
President, Irish Farmers’ Association (IFA)
Resigned 8 April:
Mr Tom Parlon
President, Irish Farmers’ Association (IFA)
Mr Michael Dowling
Company Director,Visiting Professor
UCC and Head of Agri Strategy, AIB
Resigned 19 July:
Ms Mary White
Lir Chocolates Ltd.
Mr Michael Kilcoyne
Chairman, Consumers’ Association of Ireland
Mr Dan Lenihan
Chairman, Bord Glas
Appointed 24 September:
Ms Gina Quin
Resigned 31 October:
Ms Maura Nolan
Head of Food Division, Department
of Agriculture & Food
Mr Denis Lucey
Chief Executive, Dairygold
Co-Operative Society Ltd.
Mr William O’Kane
Managing Director, O’Kane Poultry Ltd.
Mr Pat O’Rourke
President, Irish Creamery Milk
Suppliers’ Association (ICMSA)
Term Expired 28 November:
Mr John Dillon (re-appointed 6 December)
Mr Michael Kilcoyne (re-appointed 6 December)
Ms Margo Monaghan Principal Officer,
Department of Enterprise,Trade & Employment
Term Expired 30 November:
Mr John Duggan
Director Glanbia
Mr Joseph O’Sullivan
Chief Executive, Drinagh
Co-Operative Society Ltd.
Ms Gina Quin
Chief Executive, Dublin Chamber of Commerce
Mr Sean Buckley
President, Associated Craft Butchers’ of Ireland
Mr Paul Clarke
National Executive of the Livestock Trade
Mr Derek Deane
Chairman, National Livestock Committee, IFA
Mr Laurance Fallon
Chairman, National Sheep Committee, IFA
Mr Alan Graham
IFA Poultry Committee
Mr John Horgan
Managing Director, Kepak Group
Mr John Madden
Chief Executive, Glanbia Meats
Term expired 1 September:
Mr Denis Lucey
(re-appointed 3 October)
Term Expired 26 September:
Mr Frank Corcoran
IFA
Mr Eddie Keane
IFA
Mr Tom McParland
Kildare Chilling Company Ltd.
IFA
Appointed 3 October:
Mr Alan Graham (re-appointed)
Mr Laurance Fallon
Mr John Horgan
Mr Pat O’Keeffe
Dr Pat Mulvehill
Director General, Irish Poultry
Processors’ Association
Ms Brid O’Connor
Assistant Director, Office of
the Director of Consumer Affairs
Mr Pat O’Keeffe
Chairman, National Pigs Committee, IFA
Mr Nicholas Ryan
National Council, Irish Creamery
Milk Suppliers’ Association (ICMSA)
Appointed 6 December:
Mr Dan Lenihan
Annual Repor t and Financial Statements 2002
Annual Repor t and Financial Statements 2002
33
Consumer Foods Board
Membership
Quality Assurance Subsidiary
Board Membership
Year ended 31 December 2002
Year ended 31 December 2002
Chairman
*Chairman
Mr Michael Dowling
Company Director,Visiting Professor
UCC, and Head of Agri Strategy, AIB
Vacant
MEMBERS
CHANGES DURING 2002
MEMBERS
CHANGES DURING 2002
Ms Darina Allen
Ballymaloe Cookery School
Term Expired 10 March:
Mr Con Lucey
Golden Vale
Professor Joe Buckley
Lecturer in Food Science & Technology, UCC
Term Expired 30 November:
Mr John Duggan (Chairman)
Director, Glanbia
Ms Dorothy Gallagher
Vice-Chairman
Consumers’ Association of Ireland
Mr Pat Given
Ex-UDV Operations Ireland
Ms Eilis Gough
Managing Director, Mileeven Fine Foods
34
Resigned 3 April:
Mr Pat Doyle
Rye Valley Foods
Term Expired 1 September:
Mr Michael Dowling
(re-appointed 3 October)
Term Expired 27 October:
Mr Joe O’Flynn
(re-appointed 4 December)
Mr Tom Harrington
Arabawn Co-Op. Nenagh
Ms Paula Mee
Food & Nutrition Adviser, Superquinn
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
President, St Joseph’s University, Philadelphia
Ms Gina Quin
Chief Executive
Dublin Chamber of Commerce
Mr Paddy Walsh
(re-appointed)
Appointed 3 October:
Fr. Nicholas Rashford
Mr John Toomey
Appointed 4 December:
Ms Paula Mee
Mr Kevin Cassidy
Department of Agriculture & Food
Mr John Cunningham
General Manager, Dairygold Food Products
Mr Derek Deane
Chairman, National Livestock Committee, IFA
Mr Dermot Jewell
Chief Executive, Consumers’
Association of Ireland
35
Mr Paul Nolan
General Manager, Dawn Meats (Grannagh) Ltd.
Mr Eamon Quinn
Marketing Director, Superquinn
Ms Brid O’Connor
Assistant Director, Office of
the Director of Consumer Affairs
Dr Jim O’Grady
Consultant
Mr Pat O’Rourke
President, ICMSA
Mr John Toomey
Managing Director, Rye Valley Foods
Mr Brendan Smyth
Glanbia
Mr Paddy Walsh
Director,Walsh Family Foods
Dr Pat Wall
Chief Executive, Food Safety Authority of Ireland
Annual Repor t and Financial Statements 2002
*Mr Joseph O'Sullivan
was appointed Chairman in January 2003
Annual Repor t and Financial Statements 2002
The Organisation
Organisation Structure
Year ended 31 December 2002
The organisation structure of 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.
The following Board Committees are in place: Audit Committee, Evaluation Committee, Remuneration
and Pensions Committee and Strategy Committee. The Executive is comprised of staff based in the
Board’s head office and overseas.
37
36
Board
Quality
Assurance Board
Meat & Livestock
Board
Consumer
Foods Board
Board
Committees
Chief Executive
Administration
Annual Repor t and Financial Statements 2002
Operations
Directorate
Client Services
Directorate
Annual Repor t and Financial Statements 2002
Marketing
&
Communications
Report of the Comptroller
and Auditor General
I have audited the financial statements on pages 39 to 51 under section 21 of An Bord Bia Act 1994.
Respective Responsibilities of the Board and the Comptroller and Auditor
General
The accounting responsibilities of the Board are set out in the Corporate Statement on pages 29 to
31. It is my responsibility, based on my audit, to form an independent opinion on the financial
statements presented to me by the Board and report on them. I review whether the statement on the
system of internal financial control on page 30 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.
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:
Subsidiary Boards:
Under the terms of the 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.
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.
38
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 judgements 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 2002 and of its income and expenditure and cash flow for the year then ended.
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.
(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
10%
12.5%
20%
331/3%
Motor vehicles
20%
(e) Marketing finance:
John Purcell
Comptroller and Auditor General
30 June 2003
Annual Repor t and Financial Statements 2002
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.
Annual Repor t and Financial Statements 2002
39
Statement of
Accounting Policies
Income and Expenditure
Year ended 31 December 2002
(f) Superannuation:
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 2002 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:
40
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:
2002
€'000
2001
€'000
1b
1c
18,507
231
5,297
2,796
17,013
41
5,777
2,546
2
26,831
(667)
25,377
22
26,164
25,399
15,755
804
9,629
26,188
(24)
93
69
15,584
1,116
9,004
25,704
(305)
398
93
Notes
Income
Oireachtas Grant-in-Aid
EU Quality Beef Promotion Fund
Statutory Levy
Project and Other Income
Transfer (to)/from Capital Account
1a
Total Income
Expenditure
Marketing and Promotional Expenditure
Marketing Finance
Operating Expenditure
Total Expenditure
Deficit for Year
Balance at 1 January
Balance at 31 December
3
4
5
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:
The Board has no gains or losses in the financial year or the preceding financial year other than those
dealt with in the Income and Expenditure Account.
The results for the year relate to continuing operations.
The Statement of Accounting Policies and Notes 1 to 16 form part of these financial statements.
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.
Philip Lynch
Chairman
Michael Duffy
Chief Executive
(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 Repor t and Financial Statements 2002
Annual Repor t and Financial Statements 2002
41
Balance Sheet
Cashflow Statement
Year ended 31 December 2002
Year ended 31 December 2002
2002
€'000
Notes
2001
€'000
Assets Employed
2001
€'000
Deficit for year
Net Interest receivable
Depreciation
Capital account transfer
Loss on Disposal of tangible fixed assets
(Increase)/Decrease in debtors
(Increase)/Decrease in stocks
Increase/(Decrease) in trade creditors
(Decrease)/Increase in taxation and PRSI
Increase/(Decrease) in accrued and deferred income
(24)
(84)
431
667
49
(148)
(5)
123
(49)
373
(305)
(95)
301
(22)
5
143
2
(100)
80
(214)
Net cash inflow/(outflow) from operating activities
1,333
(205)
Reconciliation of Deficit to Net Cash Inflow/
(Outflow) from Operating Activities:
Fixed Assets
Tangible Assets
Financial Assets
6
7
1,587
8
1,595
920
8
928
9
2,187
381
2,577
4
2,039
111
2,154
2,516
2,069
61
85
Current Assets
Stocks
Debtors
Cash at bank and in hand
8
Creditors
(amounts falling due within one year)
42
2002
€’000
9
Net Current Assets
Total Assets less Current Liabilities
Financed by
Capital and reserves
Capital account
Income and expenditure account
2
1,656
1,013
1,587
69
1,656
920
93
1,013
CASHFLOW STATEMENT
1,333
(205)
84
1,417
95
(110)
(1,147)
(284)
Increase/(Decrease) in Cash
270
(394)
Reconciliation of net cash flow to
movement of funds
Increase/(Decrease) in Cash
Net funds at 1 January
270
111
(394)
505
Net funds at 31 December
381
111
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 16 form part of these financial statements.
Philip Lynch
Chairman
Michael Duffy
Chief Executive
43
Net cash inflow/(outflow) from operating
activities
Returns on investment and servicing
of finance:
The Statement of Accounting Policies and Notes 1 to 16 form part of these financial statements
Philip Lynch
Chairman
Annual Repor t and Financial Statements 2002
Michael Duffy
Chief Executive
Annual Repor t and Financial Statements 2002
Notes forming part of
the Financial Statements
Notes forming part of the
Financial Statements
Year ended 31 December 2002
Year ended 31 December 2002
1. Income
(a)
(b)
(c)
Included in Oireachtas Grant-in-Aid is €6,735,000 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.
The 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.
Project and other income includes industry contributions to joint promotions, steak bar sales
at trade fairs, and seminar and conference fees.
2. Capital Account
€'000
44
Balance at 1 January 2002
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
920
1,147
(49)
(431)
Marketing Development Programmes
Trade Fairs and Exhibitions
Information Services
Quality Assurance
Trade Services
Marketing Services
Communications
Nutritional Advisory Services
Marketing Improvement Assistance Programme
Market Participation Programme
2001
€'000
436
368
410
706
804
1,116
351
5,369
1,269
254
1,893
13
431
49
9,629
283
4,723
1,216
199
2,265
12
300
6
9,004
5. Operating Expenditure
Board and Sub-Board Members' fees and expenses
Staff costs
Rent, rates and insurance
Telecommunications costs
General business expenses
Audit fee
Depreciation (Note 6)
Loss on disposal of tangible assets
667
Balance at 31 December 2002
3. Marketing and Promotional Expenditure
2002
€'000
4. Marketing Finance
2002
€'000
1,587
2002
2001
€'000
€'000
6,476
2,633
2,026
0,642
2,094
1,210
322
352
5,717
3,275
1,396
634
3,397
390
298
477
15,755
15,584
Annual Repor t and Financial Statements 2002
45
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
4,396
314
659
5,369
3,921
256
546
4,723
The total number of employees (including part-time persons) at 31 December 2002 was 79 (2001: 75).
The cost of certain part-time employees is included in Marketing and Promotional Expenditure.
Annual Repor t and Financial Statements 2002
Notes forming part of
the Financial Statements
Notes forming part of the
Financial Statements
Year ended 31 December 2002
Year ended 31 December 2002
6.Tangible Fixed Assets
Cost
8. Debtors
Leasehold
improvements
€000
Furniture
and fittings
€000
Computer
equipment
€000
Office
equipment
€000
Motor
vehicles
€000
Total
€000
838
802
(3)
636
101
(25)
451
105
(30)
575
90
(79)
97
49
(50)
2,597
1,147
(187)
1,637
712
526
586
96
3,557
At 1 January 2002
Additions in year
Disposals
At 31 December 2002
Depreciation
At 1 January 2002
Charged in year
Disposals
450
163
464
67
(16)
337
95
(28)
388
87
(65)
38
19
(29)
1,677
431
(138)
At 31 December 2002
613
515
404
410
28
1,970
Amounts falling due within one year:
Debtors
Prepayments and accrued income
2002
2001
€'000
€'000
1,435
752
2,187
1,303
736
2,039
678
141
1,697
2,516
556
189
1,324
2,069
9. Creditors
Amounts falling due within one year:
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:
46
Net Book Amounts
At 31 December 2002
At 31 December 2001
1,024
388
197
172
122
114
176
187
68
59
1,587
920
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 Repor t and Financial Statements 2002
Income Tax
P.R.S.I.
47
104
37
141
139
50
189
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 2002
Annual Repor t and Financial Statements 2002
Notes forming part of the
Financial Statements
Notes forming part of the
Financial Statements
Year ended 31 December 2002
Year ended 31 December 2002
11. Provisions for Liabilities and Charges
Value Added Tax
13. Contingent Liabilities
At
1 January
2002
€000
Provided/
(Released)
during
year
€'000
(a)
At
31 December
2002
€'000
411
(167)
244
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:
Marketing Improvement Assistance Programme
Targeted Marketing Consultancy Programme
This provision is included within Creditors.
2002
€'000
2001
€'000
608
505
211
275
1,113
486
12. Commitments
48
(a)
Capital Commitments
An Bord Bia had no capital commitments at the year end.
(b)
Financial Incentives
There were no commitments in respect of Marketing Finance Programmes at the year end.
(c)
Operating Leases
Operating leases comprise leases on premises. Leasing commitments payable during the next
twelve months amount to €993,935 made up as follows:
Payable on leases on which the commitment expires:
Within one year
Within two to five years
Six years and over
(b)
€'000
31
820
143
994
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.
49
14. Recoverable Incentives
Under the terms of the Targeted Marketing Consultancy (TMC) Programme, a total of €2,911 was due
to be recovered in 2003 and subsequent years from participating companies:
Estimated amount recoverable at end of year
2002
€'000
3
2001
€'000
3
Recoverable incentives are accounted for on a cash receipts basis and accordingly are not included
in debtors.
Annual Repor t and Financial Statements 2002
Annual Repor t and Financial Statements 2002
Notes forming part of the
Financial Statements
Notes forming part of the
Financial Statements
Year ended 31 December 2002
Year ended 31 December 2002
15. Superannuation
15. Superannuation (contd.)
The Board operates a defined benefits superannuation scheme for certain eligible employees, for which the
The financial assumptions used to calculate the components of the defined benefit cost for the year ended
approval of the Minister for Agriculture and Food and the Minister for Finance has been received.The
31 December 2002 were as follows:
contributions of employees and Bord Bia are paid into a fund managed by the trustees and the total funding
Valuation Method
rate is in accordance with actuarial recommendations.
Discount Rate
6.0%
Inflation Rate
2.5%
For accounting periods ending on or after 2 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.
Salary Increases
4.5%
Pension Increases
4.0%
Analysis of the amount which would be charged to operating profit is as follows:
€'000
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
462
Past Service Cost
Interest on scheme liabilities
be disclosed in a note to the financial statements.
A full actuarial valuation was carried out as at 1 January 2001 and updated by a qualified independent actuary
50
Current Service Cost
-
Analysis of the amount which would be credited to other finance income is as follows:
and the amounts recognised in the Statement of Recognised Gains and Losses
·
Projected Unit
Expected return on scheme assets
549
(652)
to take account of the requirements of FRS 17 in order to assess the liabilities at the balance sheet date.
Analysis of the amount which would be recognised in the Statement of Total Recognised Gains and Losses
Scheme assets are stated at their market values at the balance sheet date.
(STRGL) is as follows:
€'000
The financial assumptions used to calculate the retirement liabilities under FRS 17 were as follows:
Actual return less expected return
At 31 December 2002
General salary increases
4.00%
Promotional salary increases
0.50%
Rate of increase of pensions in payment
4.00%
Discount rate
5.50%
Inflation assumption
2.25%
Long-term rate
Value at 31 Dec
Changes in assumptions
(1,128)
Actuarial deficit recognised in STRGL
(4,749)
Deficit at beginning of year
(284)
Curent service cost
(462)
Contributions
517
2002
2001
at 31 Dec 02
€’000
€’000
Other finance income
Actuarial deficit
(4,749)
Deficit at end of year
(4,875)
7.75%
5,152
6,062
Bonds
4.75%
1,592
1,677
Property
6.75%
84
Cash
3.00%
861
Other
Net deficit in pension scheme
(1,464)
of return expected
Equities
Present value of scheme liabilities
(2,157)
Experience gains and losses
Analysis of the movement in deficit during the year is as follows:
The assets in the scheme and the expected rate of return were:
Total market value of assets
on scheme assets
103
16. Board Members - Disclosure of Transactions
In the normal course of business the Board may approve grants and may also enter into other contractual
860
7,689
8,599
12,564
8,883
(4,875)
(284)
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. Grants totalling €40,000 were approved, and grants totalling €14,662 were paid during the year to companies
with which Board Members are associated.The Members did not receive Board documentation on the proposed
grant assistance nor did the Members participate in or attend any Board discussion relating to the matter.
51
Marketing Finance Grant
Payments 2002
Company
Company
Amount
Abbey Blue Cheese (ABO)
€3,000
Irish Food & Drink Exports
€21,000
Allin All Ingredients Ltd
€5,035
Irish Yogurts Ltd
€38,732
Ardrahan Dairy Products
€710
John O'Sullivan Ltd
Ballybrado Ltd
€6,550
Lir Chocolates
Benson Food Products
€6,348
M&S Browne Ltd
Blenders
Cahill International
Carlow Craft Brewery
Celtic Chocolates
Chivers Ltd
€21,458
€4,131
€19,000
€7,349
€25,000
Marigot
Mileens Cheese
Mileevin Ltd
Milne Foods Ltd
Missy & Mandy's Ice Cream Ltd
€1,000
€14,662
€3,200
€30,000
€2,856
€961
€3,480
€662
Chocaid Com Ltd
€3,000
Mrs Collins Ice Cream
€1,590
Chocca Mocca
€1,650
National Food Ingredients
€6,474
Compsey Creamery Ltd
52
Amount
Notes
€45,000
Quality Irish Food
€50,750
€10,000
Cooleeney Cheese
€8,987
Radical Fruit Company Ltd
Dansko Foods Ltd
€3,499
Rajdoot
€3,197
Derryvilla Farm
€9,000
Real Food at Home
€6,000
Dromkeen Food Ingredients
€4,988
Roaring Water Bay Spirits Co
€4,214
Druid Chocolates
€1,651
Rock Island Foods
€1,294
€3,611
Rose Confectionery
€2,000
Rosscarbery Oysters Ltd
€2,295
Durrus Farmhouse Cheese
Ennis Foods
Flair Confectionery Ltd
Foxrock Food Co Ltd
€38,092
€396
€5,136
Shannon Minerals
€40,000
Sheila's (Mayo) Ltd
€6,000
Freshways Ltd
€20,000
Silver Pail Ltd
€6,079
Gallaghers Bakery
€15,000
South Sligo Cheese Co
€3,405
Gallweys of Waterford
€2,027
Stable Diet Ltd
€2,904
George Mogerley Ltd
€3,841
Su Si Foods
€1,848
Glaslough Foods
€3,571
Sunshine Juice
€8,990
€30,000
Swift Fine Foods
€10,000
Glyde Farm Produce
€4,442
Swissco Ltd
€29,013
Gourmet Duck Co
€2,649
The Country Cooking Co Ltd
Green Pastures
€9,939
The Irish Chocolate Company Ltd
€34,343
Heron Quality Foods
€9,500
Tipperary Organic Ice Cream
€10,000
Glenisk Ltd
Hot Irishman
Inagh Farmhouse Cheese
Ingredient Solutions
€30,000
€5,000
€31,760
Torc Truffles Ltd
€4,891
€3,237
Virginia House Trading Co Ltd
€18,524
Zed Gum
€38,297
Annual Repor t and Financial Statements 2002
Annual Repor t and Financial Statements 2002
Notes
Annual Repor t and Financial Statements 2002