Farm Ireland

Friday 23 March 2018

Sparks fly as Kerrygold heads for Cork

Kerrygold is the premier Irish butter brand
Kerrygold is the premier Irish butter brand

Declan O'Brien and Martin Ryan

A major row has erupted between the Irish Dairy Board (IDB) and Glanbia following the IDB's decision to locate a new production and packing facility for Kerrygold on a Dairygold Co-op site in Mitchelstown, Co Cork.

It had been forecast within the dairy industry that the IDB development would be undertaken in conjunction with Glanbia Ingredients Ireland (GII) at one of their plants in either Belview or Ballyragget.

However, negotiations between the IDB and GII stalled and an alternative site was offered by Dairygold.

One industry source said the IDB decision to opt for the Dairygold site has led to a serious dispute between IDB and GII. He said relations between the two parties were "fairly hot" and "obviously messy".

The IDB decision will see the development of a state-of-the-art production and packing facility at a Dairygold's Castlefarm Complex in Mitchelstown.

The new facility will provide IDB with a fully integrated butter production and packing unit for its blue-chip Kerrygold brand.

It is envisaged that the Mitchelstown site will become a dedicated centre of excellence for IDB and will centralise the innovation capability for Kerrygold.

Lucrative markets

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"The state-of-the-art facility will support the future growth and development of the Kerrygold brand in a range of packing formats on a single site," an IDB spokesperson said.

Kerrygold is the premier Irish butter brand and has carved out lucrative markets in Britain, the US and continental Europe since it was launched in the 1960s.

Last year Kerrygold sales hit a record high of €316m in Germany.

Meanwhile, there are growing fears in the dairy sector that global milk output increaseswill hit prices.

The latest production figures show that French milk supplies are running 9.9pc ahead of last year, German milk output is 5.5pc ahead of 2013, while British milk output is up 11.5pc.

Milk supplies are also well up in New Zealand, with year-to-date supplies running 8pc ahead of 2013.

Year-to-date milk production in the US is up 1.1pc.

Industry insiders said the one positive was that the Chinese were still buying.

Locally, the latest drop in the IDB index – from 131.5 in March to 133.5 in February – was viewed as reflecting the increased volumes on world markets.

Meanwhile, some concern has been expressed by processors at the reduction in the IDB butter pricein the four months since December.

It is understood the price has fallen €625/t since December, dropping from €4,000/t to €3,375/t in March.

Indo Farming