Farm Ireland
Independent.ie

Friday 16 November 2018

IFA and Glanbia clash over dairy giant's plans for US expansion

Photo Mark Stedman/Photocall Ireland
Photo Mark Stedman/Photocall Ireland
Declan O'Brien

Declan O'Brien

The IFA and Glanbia have clashed over plans by the dairy giant to launch a new Truly Grass Fed (TGF) consumer brand in the US.

IFA said it was "extremely concerned" that the TGF brand would undermine the lucrative US market for Ornua's Kerrygold dairy range and that Irish farmers would pay the price for any head-to-head battle between the parties.

"IFA strongly supports the Kerrygold brand, which farmers and their co-ops have invested heavily in over the last six decades," IFA stated.

"The concept of marketing and selling Irish dairy products under a common brand, through Ornua, has proven to be a successful model which is envied by many other countries."

However, Glanbia rejected suggestions that the launch of the TGF brand was aimed at muscling in on Kerrygold's share of the US market.

"The TGF brand is not a direct competitor of Kerrygold - it's targeted at a growing niche of informed consumers seeking verifiable claims on their food labels," a spokesman said.

IFA claimed that a retail battle between Ornua and Glanbia had the potential to do significant damage to market returns.

"This issue must be thrashed out between Ornua, Glanbia and other Ornua member co-operatives as relevant.

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"We farmers simply cannot afford to see the market value we depend on for our livelihoods being destroyed in the market place by our own co-ops," the farm organisation insisted.

Reacting to the IFA's concerns, a Glanbia Ireland spokesman insisted that TGF will not undercut Kerrygold on price in the US cheese market.

He also pointed out that after Glanbia identified the market opportunity for a new grass-fed range, they initially approached Ornua with a view to offering it through their marketing structure.

Glanbia insisted that it remained a strong supporter of Ornua, as its largest shareholder, and fully backed the concept of centralised marketing of Irish dairy produce.

"As its largest shareholder, Glanbia is and will continue to be a strong supporter of Ornua and Kerrygold, but our farmers have invested heavily in their farms and we need to maximise returns from the market for their growing milk volumes," the spokesman explained.

"This will require targeting multiple market niches, of which the natural category in the US is just one. Does IFA object to the development of new brands to sell Irish grain?

"By targeting niche markets, such as gluten-free oats, 40pc of Glanbia's grain intake is now on premium contracts.

"We need to look at this [TGF] opportunity from a global dairy market perspective and see how we can grow the total sales of Irish dairy products in value-added markets for the benefit of Irish dairy farmers."

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