Sterling's decline against the euro since September is undermining Irish food and drink exports to Britain and will cost markets abroad and jobs at home, Food and Drink Industry Ireland has said.

It said the €3.6 billion export trade and competition against British companies were coming under sustained pressure because of the 10 per cent weakening of sterling against the euro.

Food and Drink Industry Ireland, an Ibec group, said the slide in the value of the UK currency was creating serious competitive pressure.

"It is having a dramatic effect on the industry's competitiveness in our most important export market.

"The UK accounts for 42 per cent (€3.62 billion) of Irish food and drink exports and, although there has been ongoing market diversification into other EU markets and further afield, our neighbour remains by far our biggest market," said director Paul Kelly.

"For five years we have had relative exchange rate stability with the sterling rate against the euro being in the range £0.65-£0.69. The euro has now moved sharply up to over £0.75 sterling.," he said.

"The consequences of such a move are extremely worrying. It is inevitable that we will lose markets abroad and jobs at home. What is needed is a renewed focus on maintaining the competitiveness of the sector," he added.

He said the Ibec food and drink group would support measures to reduce business costs, such as pay moderation, to remain competitive.

"Utilities such as energy and waste management account for 23 per cent of total costs in the food sector, according to the National Competitiveness Council, and transport costs account for 21 per cent of total costs," he said.

"We are exposed to these costs more than any other industrial sectorand the high level of inflation in these areas has disproportionately affected food and drink manufacturers".