Tesco cuts part of Glanbia’s milk supply contract

Glanbia has lost part of its milk contract to supply own-brand milk to Tesco to Arrabawn and Aurivo.

Following a recent review, Tesco appointed both Aurivo and Arrabawn to also supply Tesco brand milk in Ireland.

A spokesperson for Tesco said that in addition Glanbia continues to supply the popular Avonmore brand to Tesco customers and Glanbia has retained 100% of its contract to supply own brand cream and butter.

“As a result Tesco now sources dairy products from farms right across the country and continues to be the single biggest buyer of Irish food and drink in the world,” the spokesperson said.

Tesco confirmed that 100% of the fresh milk sold in Tesco Ireland stores is 100% Irish and National Dairy Council approved.

A spokesperson for Glanbia would not comment on what percentage of the contract Glanbia has lost and could not give an indication as to how many litres this loss equates to.

“Glanbia Consumer Products is the leading supplier of branded consumer dairy products to the Irish market. It also supplies private label liquid milk to the Irish market and produces long life dairy products for export,” the Glanbia spokesperson said.

Glanbia Consumer Products does not comment on commercial arrangements with individual customers, including pricing or contractual matters, which are commercially sensitive.

Earlier this year, Glanbia released its 2015 figures which showed that the group’s revenue was up on 2014 levels to €3,667.4m.

Earnings before interest, taxes and amortization (EBITA) was at €310.7m – up from €245.0m in 2014. Adjusted earnings per share stood at 79.14c for 2015.

Glanbia is the largest milk processor in the country, processing 1.8 billion litres of milk on an annual basis.