May Council Meeting Hears that Bord Bia's Logistics Coopetition Study at Advanced Stage

The May IEA Food and Drink Council meeting took place on Wednesday 11th May 2011 in the Teagasc Ashtown Food Research Centre in Dublin 15. 

The first speaker was Noreen Lanigan of Bord Bia's Paris office who spoke on the subject of Bord Bia's on-going 'Continental Europe Logistics Optimization Study'.   

The study's main focus, she said, is applying best practice to Logistics and looking at economies of scale for Irish exporters to make us more competitive in the European context. She believes that their research indicates that at least €400 million per annum is spent on logistics by Irish food exporters and this amounts to 7% of export value.

She said that in a best case scenario, 30% could be taken out of the costs of logistics through a mix of improving use of best practice and coopetition. In the more modest scenario, the saving would be 10%.

There are 3 Coopetition Models Bord Bia are investigating:
1) Creating an Ireland Logistics Integration Service similar to the one in the UK called Isotrack 3IS club which is an online club of food and drink manufacturers, retailers and hauliers. Manufacturers post up routes they need quotes for, hauliers post up routes where they’ve free space and a mediator does the match making.

2) Regional Consolidation: Looking at major regions in Ireland where food and drink exporters are based i.e. South and East of Ireland and find a solution for these 2 regions first, consolidating loads leaving those two regions.

3) Customer Consolidation: Consolidating shipments to key continental European customers. An example NL gave was Carrefour which has 25 Irish suppliers who all manage logistics separately. While not all of these could be consolidated due to product temperature issues, there were many that could, she said.

The Council were supportive of this initiative. The Chairman, Bernard Coyle, stated that the market was very fragmented and that manufacturers had certain fears working with others but if an independent platform could be set up and companies could choose who they worked with, it would be very welcome. There always has to be an opt out, he said, for those who don’t want to share trucks with a competitor and this was the big challenge. Michael Murphy said he believed there had been a lot of progress over the last year with Bord Bia now working with 30 companies on coopetition projects.

Bord Bia are presently developing and fully costing these models and there will be an update for industry by the end of May. 
  
The second speakers were Terry O'Driscoll and Mary Douglas of PricewaterhouseCoopers (PwC) gave an overview of how Irish exporters can avail of Irish tax incentives. One area that provoked a lively discussion was the area of R&D tax credits and what constitutes R&D.   

Finally Paul Murphy of Finalysis Ireland gave a presentation on their business and how it can help companies find savings in dealing with their banks. 

To view agenda, please click here