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Shipping firms charging extra to transport food, Ornua boss warns

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Kerrygold gives Ornua a significant presence in Germany

Kerrygold gives Ornua a significant presence in Germany

Kerrygold gives Ornua a significant presence in Germany

Irish food producers are being hit with extra charges to transport products in chilled containers, with shipping lines blaming the huge numbers of containers stuck in Chinese ports, according to Kerrygold maker Ornua's CEO.

"Everything is not operating as normal," John Jordan told the Irish Independent. "If you wanted to move product from Ireland to the US, the likelihood was that the container you wanted was stuck in a port in China so there is now a premium surcharge put on by shipping companies."

The co-operative has two main divisions: retail, where it sells directly to supermarkets, and ingredients, where it supplies produce to other manufacturers and food service companies. The retail arm has benefited from a "huge spike" in demand.

However, the collapse of the food service sector "is unlike anything before", Mr Jordan noted.

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John Jordan

John Jordan

John Jordan

Ornua estimates demand for dairy products globally will fall by between 10pc and 12pc but says it will continue to pay milk suppliers in line with 2020 agreements.

It is really important the business, which has 13 factories around the world, can keep its people safe and its supply chains operating, Mr Jordan said.

Ornua said it did not see a fall in demand for its butter in the United States despite being hit last year by a 25pc tariff amid rising US and European trade tensions.

"We were OK for November and December because it is Thanksgiving and Christmas, peak season for butter. We were worried coming into 2020 that the new increased price would impact demand, but ironically in the Covid-19 environment, retail sales have seen the same spike in the US market," Mr Jordan said.

Ornua's operating profit rose 22pc to €49m last year. Turnover rose 12pc to €2.3bn.

Irish Independent