Farm Ireland
Independent.ie

Tuesday 22 August 2017

Dairy bosses seek state support on €500m cheddar trade

Cheddar cheese producers want to retain and grow their UK markets
Cheddar cheese producers want to retain and grow their UK markets
Louise Hogan

Louise Hogan

The country's dairy giants are seeking Government supports as they explore post-Brexit options for cheddar exports.

Carbery, Dairygold, Glanbia and Kerry, along with the marketing body Ornua, held a meeting with the Department of Agriculture and Minister Michael Creed as they move to limit their Brexit exposure.

"Whatever happens with Brexit it will be a catalyst to ensure that everyone works together," said Dairygold's Jim Woulfe, adding collective involvement was crucial."The potential of the worst case scenario is well-known."

Irish Dairy Industries Association (IDIA) analysis has shown that 90pc of the cheese output from the four manufacturing firms is comprised of cheddar, with 56.5pc sold into the UK.

Cheddar exports alone from these companies are valued at almost half a billion euro.

The IDIA's Conor Mulvihill warned the potential of a Brexit "cliff edge" scenario for cheddar remained a major risk as it was so dependent on the UK market.

He said they wanted to retain and grow their UK markets and ensuring the UK remained within the customs union was a key objective.

"The loss of the UK portion of this cheddar export outlet would equate to just under one fifth of our manufacturing milk pool, something that would hit hard into every rural parish in Ireland," said Mr Mulvihill.


"The knock on impact of the potential loss of our whey streams from cheddar manufacture would also impact our growing high value specialised nutrition industry in Ireland."

In Dairygold's case 30,000t of cheese are destined for the UK, accounting for 200 million litres of their 1.3 billion litre raw milk pool.

"The market is very narrow for cheddar cheese and the issue is that all of us as processors have invested significant capital over the past decade," said Mr Woulfe.

He added that the valuable whey stream that goes into infant and adult nutrition would not be precisely the same if created from other cheese.

Solutions

Mr Mulvihill said they had put forward three potential solutions

  • Industry and Government to invest heavily in a market fund to target overseas markets and new product development there
  • An aggressive capital expenditure plan to adapt facilities for new core cheese products and packaging
  • Ensuring the EU raise State Aid ceilings to recognise the threat to Irish agriculture as a 'force majeure'.

Mr Mulvihill said the State bodies need to fully grasp the "enormity of the diversification challenge".

Glanbia Ingredients Ireland's Jim Bergin said around 20-25pc of GII products currently go into the UK market and they would diversify to other locations to a "degree".

He said Government support to diversify and build new markets would be important. "We are developing cheese in Asia," he said. "There are new horizons there, it is cheddar but a variant of cheddar, kind of drier."


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