Farm Ireland

Saturday 23 June 2018

UK supermarkets 'British-only' policy poses new threat to Irish dairy sales

Tesco will use only British milk in its own-brand yoghurt.
Tesco will use only British milk in its own-brand yoghurt.
Darragh McCullough

Darragh McCullough

A new threat to Irish milk sales has emerged following moves by UK multiples to source dairy products made only from British milk.

Following intense lobbying and protests by English farmers last week, Tesco announced that it would use only British milk in its own-brand yoghurt from March next year. The yoghurt line is currently made with German milk.

The increasing re-nationalisation of purchasing policies as dairy prices continue to plummet could hit Irish cheese exports next. Ireland relies on Britain for close to one third of its cheese sales.

Tesco management agreed to re-examine its cheese labels following comments by the UK Environment secretary Elizabeth Truss that more than half of the butter and cheese bought in Britain was imported.

Ireland is one of the biggest exporters of cheese to the UK, facilitated by the large packing plant operated by Adams Foods for Ornua (Irish Dairy Board) based in Leek.

It provides a route for close to 50,000t of Irish cheese into the British market annually, representing almost one third of all the hard cheese sold in the UK.

However, Ornua's practice of re-packing large 20kg blocks of cheese into small retail packs labelled with 'packed in UK' is the target of increasing levels of criticism from the British public as their farmers struggle to stay in business.

"The idea that a cheese pack can state that the country of origin is UK, Ireland and New Zealand is just ridiculous, and consumers deserve better. But this is not about pitching Irish farmers against British farmers," said Farmers for Action leader, David Handley.

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Meanwhile, the first of Irish product will be sold into EU intervention this week. Despite prices of €1,700/t (equating to 21c/l) for skimmed milk powder (SMP), processors are using the bargain-basement outlet following reports of fire sales of Irish SMP for prices even lower than this.

However, there was one small piece of good news for Irish dairy farmers this week, with the announcement by the Department of Agriculture that the amount of 'flexi-milk' available to ease superlevy bills is double that previously calculated. The final amount is now expected to be 10.6m litres, with 7.6m coming from the National Reserve.

With an estimated 6,500 farmers over quota, it equates to approximately 1,600 litres of milk quota for each on average. However, the amounts will vary, depending on quota size and co-op.

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