KPMG report gets a muted response
Published 07/06/2011 | 05:00
The much-anticipated KPMG report on the dairy processing sector generated a muted response when it was finally unveiled to the country's dairy chiefs in Portlaoise, Co Laois, last Wednesday.
CEOs and chairmen from 13 dairy co-ops had assembled to hear the six recommendations to emerge from the €450,000 study that took more than six months to complete.
The key suggestion was that the milk pricing system needs to be revamped to give processors an improved margin to re-invest in processing facilities and research and development.
"Ireland's seasonally driven product mix is not delivering as favourable a return per litre to the processor when compared with our international competitors," stated an ICOS press release after the meeting.
The dairy bosses were told that the current pricing system was "driving short-term behaviour".
The report recommended switching from the negotiated milk price system to one based on international markets, similar to those used by Fonterra and Friesland Campina.
The authors of the report also recommended that co-ops extend their collaborative efforts to enhance the product mix and assist funding of any such developments.