‘Milk processors undermining themselves at behest of multiples’

The average liquid milk differential over manufacturing milk has been 4.21c/L since 1995, yet the price differential between branded and non-branded milk on supermarket shelves is 40c.

Muris O Ceidigh, CEO National Milk Agency told the Forum that there is a 40c/L difference in the price between private label and branded milk on the shelves. “It’s a major undermining of their own brand by the dairy processors themselves at the behest of the multiples.”  He also said that the producer share of the retail price is now down to 37%.

He said that the corner shop represented 20% of the market in 2002 but now only account for 3% of market share, and that the three big multiples represent almost 70% of market share of liquid milk sales. Whether or not the proposed Groceries Order will deal with this, he said, remains to be seen.

The IFA’s Liquid Milk Forum also heard that just 10 processors have less than 20mL of milk being supplied, while just two processors process more than 40mL of liquid milk.

Teddy Cashman, Chairman IFA National Liquid Milk Committee, said adequate renumeration must be there for liquid milk farmers to continue and he said the margins are not there currently. “If farmers lose confidence in producing a product, those with their costs in order will decide to exit and we won’t have the fresh milk supplies the consumers demand. If we lose the expertise and commitment its very hard to get it back.”

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