Cost to businesses of exporting
A new report published by Ifac, which provides specialist advice to the farming, food and agri-business community in Ireland, reveals a number of exports challenges that create barriers to new markets for Irish businesses
An exports-focused chapter in the report reveals that ‘getting in front of customers is the hard part’, according to the businesses surveyed for the report. Andrew Brolly, Ifac, who writes this chapter, explains that 43 per cent of Irish food and agri-businesses say that market entry and distribution are the key barriers to export. This is broadly in line with last year’s figure. More than one third of respondents say that they lack market knowledge and access, and the same proportion struggle with logistics and supply chain.
The most persistent barriers, the survey suggests, are operational and commercial while for many businesses, ‘capability’ is a challenge; things like, identifying the right route to market, finding a buyer or distributor, moving the product efficiently, and pricing it at a sustainable margin.
What are the costs of market entry?
Mostly, the costs associated with entering a new market, according to the report, arise before the first sale is made. It advises on a number of costs to plan for, such as:
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Route to customer: Identifying potential distributors, carrying out due diligence, and assessing if they can build your business in the market.
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Physical: Freight, storage, distribution, returns, spoiled product, quality assurance in transit.
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Compliance: Labelling, registrations, and market-specific rules.
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Marketing: The spend required to make an Irish offering stand out.
According to the survey, 34 per cent cite logistics and supply chain as the biggest challenges, while 27 per cent identify their value proposition and marketing in new markets as a barrier.
Deepening the reach
Existing exporters, according to the report, are increasing their exposure to international markets. The share of exporters earning more than half of their turnover abroad has risen from 24 per cent to 32 per cent. With the proportion of businesses exporting broadly flat, at 61 per cent, it appears that existing exporters are deepening their reach rather than there being a new wave of entrants.
Only 24 per cent of businesses that do not currently export are planning to do so – unchanged on last year, according to the report. For a business that has never exported, the first step is the hardest to cost and the most daunting, while the overall process can be complex.
Businesses considering their first international market should sit down with their advisers, pick a market, understand the route to the customer, cost it, and pressure test the margin before committing any capital.
The 2026 Food and Agribusiness Report, provides the most comprehensive overview of the state of Irish food and agri-business companies. First launched in 2018, it is now in its ninth year. The survey was conducted across 136 businesses across Ireland, covering sole traders, micro, small, medium and large enterprises. Turnovers ranged from under €20m to in excess of that amount, ensuring broad representation of the sector.
