A cross-border investigation is under way into a 'black milk' market after it emerged farmers in the South have been trying to smuggle their over-quota produce into the Northern market.
The Department of Agriculture has confirmed it is investigating the practice, as are the authorities in Northern Ireland as well as the Foods Standards Agency (FSA), which has warned of the serious health implications of consuming milk that is not properly stored.
The Irish Creamery Milk Suppliers Association (ICMSA) last week said individuals caught selling black milk to unregistered buyers faced "savage fines" and warned that individuals could not be allowed go "outside" the system.
Before Christmas, Ulster Farmers Union president Harry Sinclair said the practice by "unscrupulous individuals" threatened the integrity of the entire dairy industry.
Last week, Bord Bia figures revealed that Irish dairy exports were worth over €3bn to the economy last year while the total value of the Irish food and drink market is up 40 per cent since 2009.
Industry experts said the black milk market could be a result of the hugely successful dairy production year enjoyed by Irish farmers, who are desperate to offload surplus milk ahead of the March deadline for milk quota production.
The quota -- an EU-set limit on the amount of milk a farmer can produce -- sees 'super levies' of 28.65c per litre imposed on over-surplus milk.
The ICMSA, the State's specialist dairy farm organisation, estimates that Ireland is currently running around two per cent over its national quota and industry sources said that could result in a levy in excess of €30m.
However, with milk quotas set to be lifted in 2015, farming groups argue it is understandable that dairy producers increase production in preparation for next year.
ICMSA president John Comer told the Sunday Independent he "recognised" the difficult position farmers were in but said the integrity of the industry was crucial given the figures from Bord Bia.
"Nothing can be allowed interfere with the reputation that we all have so carefully built up and worked to maintain. Individuals cannot be allowed go 'outside' our system of carefully supervised and monitored buyers," he said.
Two months ago PSNI officers seized a truck in Newry that was transporting several containers full of milk, understood to have been produced in the South.
A 35-year-old man was also arrested during the seizure and has since been released on bail pending further investigations. The unrefrigerated containers of milk were destroyed.
A spokesperson for the FSA, which is leading the cross-border investigation, said there were "obvious food safety issues" with milk smuggled in unrefrigerated containers.