Ornua postpones board meeting due to ‘governance issues’
The Ornua board meeting that was scheduled to take place tomorrow (Wednesday, November 14) has been postponed due to “governance issues” at board level.
The postponement comes amid growing concerns over potential challenges posed by the launch of Glanbia’s ‘Truly Grass Fed’ dairy brand in the US.
In a statement an Ornua spokesperson said: “It is the remit of the directors of Ornua to act in the best interests of the co-op, in turn protecting the interests of Irish farmers.
The directors are currently considering certain governance matters at board level and this month’s board meeting has been postponed.
Meanwhile, AgriLand understands that the chairs from all around the country’s dairy co-ops are expected to meet tomorrow to discuss the recent launch of Glanbia’s ‘Truly Grass Fed’ dairy brand in the US in Portlaoise, Co. Laois.
Last week John Jordan, the CEO of Ornua, warned that Glanbia’s Truly Grass Fed brand could “erode value” for Irish farmers by “undercutting” Kerrygold on price in the US cheese market.
However, a Glanbia spokesperson previously emphasised that The Truly Grass Fed brand is not a direct competitor of Kerrygold; but is targeted at “a growing niche” of informed consumers seeking verifiable claims on their food labels.
Speaking at the 42nd Irish Co-operative Organisation Society (ICOS) National Conference in Naas, Co. Kildare, earlier today (Thursday, November 8).
Commenting on the matter, Jordan said: “Truly Grass Fed from Glanbia’s position has a very nice story to it – in terms of this they believe there is an opportunity in the market outside of the Kerrygold brand.
We would fundamentally disagree with that. The fact is, despite how that story is constructed, Truly Grass Fed is in the mainstream retailers.
“It’s on the shelf beside Kerrygold and it is retailing at a discount to Kerrygold.
“Our concern is that that is going to erode value for the Irish dairy industry and for Irish farmers,” he said.
Glanbia Ireland has previously responded to concerns voiced by both the Irish Farmers’ Association (IFA) and ICOS on the matter.
A Glanbia spokesman said: “The Truly Grass Fed 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.”
Glanbia Ireland also pointed out that, after it identified the market opportunity for a new ‘Grass Fed’ range, it initially approached Ornua with a view to offering it through its marketing structure.
One needs to look at this opportunity from a global dairy market perspective and see how the total sales of Irish dairy products can be grown in value-added markets for the benefit of Irish dairy farmers.
It is important to note that the total US cheese market is worth $15.3 billion per annum, he said.
“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.
“This will require targeting multiple market niches, of which the natural category in the US is just one,” he said.