There is a pay-off for retailers to encourage processors in Northern Ireland to sell liquid milk in the south, increasing the competition for domestic processors according to Denis Murphy, National Milk Agency, Chairman.
Asked by members of the Oireachtas Joint Committee on Agriculture this week how processors in Northern Ireland can produce milk in the South, bring it back up North and then sell it back into the South and make money given both inherent cost and currency barriers, Murphy told the committee that there is a mystery there.
He said going back over quite a number of years, the manufacturing price within this State and in Northern Ireland have been roughly the same.
However, Murphy did say that the phenomena could be encouraged by southern retailers.
“I think there is a pay-off by the retailers. They are encouraging competition between the processors,” he said.
According to Murphy if retailers can import milk from Northern Ireland in packaged form at a lower price than that which is available in this State, they will put pressure on the processors within this State.
“That is what is happening. If one goes to any supermarket, one will see that the price for two litres of own-label milk is between €1.49 and €1.69 while all other milk costs between €2 and €2.30. The price range is very wide,” he outlined.
National Milk Agency figures show that some 25% of retail liquid milk is designated as imported equating to 1 in 4 litres.
Dr. Muiris Ó Céidigh chief executive officer, from the National Milk Agency who also addressed that committee said that Northern Ireland has, basically, had its Harvest 2020 already. He said its milk supply has increased by approximately 700 million litres since 1993 – all due to the transfer of quotas from the United Kingdom – and some 500 million litres of that milk comes into this State.
According to Ó Céidigh a full 70% of it is being processed into manufactured dairy products and 15% of it is going into the liquid milk trade.
“Basically, capacity has not been installed in Northern Ireland to process the additional milk resulting from its own increase in supply.”
He said that this is another factor contributing to large amounts of northern milk being sold on southern shelves.