Dairy processors imported 354m litres of milk between April and November last year despite farmers facing a record superlevy fine for over-production.
Figures released by the Central Statistics Office (CSO) show that the volume of milk imported between April 1 and November 30 grew by 77pc, or 155m litres, compared to the same period in 2013.
Co-ops and dairy companies attributed the lift in milk imports to increased supplies in Britain and Northern Ireland, and a shortage of processing capacity in both areas.
Most Irish dairies already have the stainless steel in place to process the expected post-quota increase in milk volumes from their own suppliers.
While Kerry and Dairygold insisted they had not imported milk last year, Arrabawn, Town of Monaghan, Aurivo and Glanbia said they had purchased British or Northern Irish supplies. Lakeland Dairies declined to comment on the issue. The lift in milk imports has sparked fears that it could undermine the credibility of Bord Bia's Sustainable Dairy Assurance Scheme (SDAS).
Bord Bia, however, maintained that any produce manufactured with imported milk had to be branded as such and that there could be "no ambiguity" on how product was represented under the quality scheme.
"The SDAS is a business-to-business initiative and it is the responsibility of all dairy processors sourcing milk from the scheme to ensure any claims in regard to origin and assurances underpinning their products are true and accurate," Bord Bia stated
A dairy sector representative insisted that the SDAS did not preclude milk imports where "the processing capacity permits or, indeed, where the market opportunity exists."
The surge in milk imports last year took place against a backdrop of higher domestic supplies which has left local dairy farmers facing massive superlevy fines.
The latest data from the Department of Agriculture has milk supplies running 6.5pc over quota nationally. Even with a drop in output over the coming 10 weeks, industry sources estimate that farmers will still have to pay between €60m and €90m in superlevy fines.
However, industry sources rejected any suggestion of a connection between increased milk imports and the superlevy fine. "Milk superlevy and milk imports are unrelated," said a processor representative.
"The superlevy situation is arising due to the higher domestic production, which we know is a factor of milk producer expansion plans, very favourable production conditions last year and strong prices for most of the season," added the processor spokesman.
But ICMSA deputy president Pat McCormack said it was "a crazy situation" where milk imports were up at the same time that many dairy farmers who wanted to supply milk would suffer a superlevy fine of 28.65c/l if they do so.
The biggest increase in milk imports over the last year came from Northern Ireland. Supplies brought in from the North grew from 180m litres in 2013 to 333m litres last year.
There was also a noticeable increase in imports of product from Britain, which grew from 18m litres to almost 20m litres between 2013 and 2014.
The total value of milk imports also rose sharply, increasing from €83m in 2013 to €137m for the eight months from April to November last year.