A new report has sounded a warning over the risks posed by Britain’s pending exit from the European Union to Ireland’s breeding and racing industry.
“Brexit has had an impact on the value of bloodstock sales in both Ireland and Britain, the fall in the value of the pound negatively impacting Irish vendors selling in Britain, although helping Irish buyers there,” the report by the consultancy firm Deloitte says.
“A satisfactory solution is also required to the Brexit threat to the current ease of movement of horses between Ireland, Britain and France.
“These factors, and the global nature of major breeding operations (for example, Britain and France recently adding to the quality of their stallions) illustrates that while Ireland arguably currently has a leadership position within Europe, its pre-eminence is not guaranteed.”
The report said Ireland’s success was built on the back of a sequence of successful stallions encouraged through Government policy and strengthened through the decades, although since the stallion stud fees exemption from corporation tax was removed in 2008, only three of the highest-priced first-season sires have stood in Ireland, in contrast to seven in the previous ten years.
It notes that breeding and racing activity in Ireland is the most prominent and important of any country on a per capita basis.
However, it warns: “Whilst the Irish Breeding industry currently has a leadership position within Europe, the nature of global breeding operations means that they will have multiple other locations to which they could relocate staff, bloodstock and ultimately investment should conditions in Ireland become less favourable.
“The fiscal environment, and in particular the implications of Brexit on the movement of horses into Great Britain and across the border into Northern Ireland, are issues that will need to be carefully managed in order to protect the €438m of sales by Irish vendors in 2016.”
The consultants calculated that the total expenditure generated by Irish breeding and racing in 2016 was €1.84 billion. It is comprised of €914 million in core industry spending, with secondary expenditure of €927 million as the initial expenditure filters through the economy.
There were 9500 full-time equivalent jobs in the core industry and a further 5700 directly-related roles including those in the equine science and veterinary fields, farriers and horse transport. When off-course betting and secondary employment were included the total number of jobs supported came to 28,900 full-time equivalent positions, spread across every county in the republic.
Breeding and racing exports amounted to more than €370 million annually, representing foreign direct investment.
There were 1.3 million who attended the 356 fixtures at the 26 racecourses in Ireland in 2016.
More than 7000 Irish people have an involvement in horse ownership and 25% of the Republic of Ireland’s adult population say they have an interest in racing.
Alan Switzer, a director at Deloitte, commented on the prominence of the industry.
“Our research identifies that breeding and racing activities in Ireland are the most prominent and important of any country on a per capita basis, having 50 thoroughbred horses per 10,000 people – many multiples more than most racing nations.
“Ireland was second only to the USA as the biggest seller of bloodstock at public auctions in 2016 by value, and more than 20% of the top 100 Flat horses in the world were Irish bred. Ireland also boasts many of the world’s leading breeders, trainers and jockeys.”
The industry’s international standing is further highlighted by the investment of many of the world’s largest thoroughbred breeders and owners, with 2300 of the horses in training being owned by international owners.
Horse Racing Ireland chairman Joe Keeling said the headline figures backed up the assertion that breeding and racing in Ireland were a unique industry with a wide rural reach and a sizeable economic impact. It was also an industry that continued to set global standards on many of the most important measures for the sector.
“Notwithstanding our success, and the popularity of racing, the most important issue that needs to be addressed is to put in place a long-term and sustainable funding structure for the industry which can allow it to be developed to its fullest potential, increasing both the economic and social dividend for the country.”
Deloitte partner Alan Flanagan said the global nature of racing brought competition between the top racing nations for owners, breeders and horses.
“It is therefore important that the Irish Breeding and Racing industry continues to invest in its infrastructure, whether that is continuing the programme of capital investment in racecourses, ensuring prize money remains competitive, the education and development of its skilled workforce or retaining high class bloodstock, particularly stallions, in Ireland.”
Other points of interest:
- Close to €200 million of bloodstock was sold overseas at public auction by Irish vendors, which when taken together with private sales, nomination and keep fees, results in effective exports of over €370 million, larger than many other forms of agriculture;
- Despite the recession of the past decade, the report estimates that more than €330m has also been invested in Breeding and Racing facilities and infrastructure, nearly €100 million of this from racecourses, with substantial future investment in progress;
- A significant proportion of the €52 million revenue generated by Ireland’s 26 racecourses is from commercial sources, the majority of this being media rights whose importance has increased significantly over the last decade;
- Major festivals are the key drivers of racecourse attendance and direct economic impact, the seven largest forming 39% of total attendance in 2016. Off-course expenditure – such as in local bars, restaurants and hotels, often by international visitors – at these festivals also provides substantial economic impact.
- The breeding and racing industry in Northern Ireland is estimated to generate £32 million of direct and indirect expenditure, driven by its two racecourses and network of trainers and breeders. The limited contribution received from the betting industry was found to be hindering growth prospects in this area.
Ireland’s agriculture minister, Michael Creed, said the report clearly showed the significance of the nation’s thoroughbred industry to the Irish economy and its position as global leaders.
“On behalf of the Government, my aim is to support the continued development of the industry’s world-class position and reputation.”
The full report can be downloaded here.