Co-op shareholders told cheap milk from the North creating difficulties

CHEAP milk from Northern Ireland is creating difficulties, the annual general meeting of Arrabawn Co-op was told in Portumna, Co Galway, yesterday.

Shareholders heard the co-op had an operating loss of e1.6 million in 2008 and must get back into profitability as soon as possible. Chairman Michael Flaherty said a notable feature in the liquid milk market is a significant shift to own label milk in the retail sector and a swing away from well-known brands.

“This is resulting in an erosion of our margin, and when this is coupled with the continued growth of imports of cheap milk from Northern Ireland it is creating very difficult conditions for us in what were traditionally strong markets”, he said.

Mr Flaherty said the society experienced considerable volatility in the prices it received for its products during last year.

“These prices fell just as quickly as they had risen, sending a shock wave through the industry.”

Mr Flaherty said Arrabawn supported the milk price as far as was reasonably possible. The cost of this support was clearly demonstrated by the fact that it incurred an operating loss for the year.

“Such losses are not sustainable, and while we will support our members as far as possible, the business must be profitable if it is to survive and grow in the future.”

Group turnover for the year was e165m, down from e178m in 2007.

Turnover in the dairy division declined from e121.36m in 2007 to e100.85m in 2008, driven by reduction in world dairy prices. The trading division showed a turnover rise from e56.83 million in 2007 to e64.17 million in 2008, driven by volume sales and price growth.