Dairygold: Brexit is a gigantic threat

The Brexit threat is the gravest agri-business has ever faced in Ireland, bosses at Dairygold have warned. Dairygold chief executive Jim Woulfe said dairy, beef and rural industry faced a crisis if a hard Brexit occurred, an event which he said had “gigantic repercussions” for Ireland.

He was speaking as Dairygold announced its annual results, which saw a €17.5m operating profit for Ireland’s largest farmer-owned diary processor, down from €19.2m in 2015. Dairygold’s turnover was down to €756m in 2016, compared to €785m the year previous. However, the co-op increased milk price support to its members to around €25m, up from €20m in 2015 and reduced its bank debt by €7.5m to just under €89m.

Dairygold said it was very satisfied with the performance as it came against a backdrop of very weak returns from international dairy markets, especially in the first half of the year.

Mr Woulfe said even with the best possible outcome on Brexit for Ireland following negotiations, “it would still be bad”. Dairygold is the biggest exporter of cheddar into Britain.

About 10% of the 6.6bn litres of manufacturing milk nationally is consumed domestically, with the rest exported. A third of that exported milk pool goes into cheese-making, which Mr Woulfe said would have stark repercussions for Dairygold and fellow Cork cheese makers Carbery in Ballineen and Kerry in Newmarket, and Glanbia in Kilkenny and Wexford.

Dairygold produced 1.2 billion litres in 2016, up 4%.

“We currently have a very sensible arrangement with the EU 28. If we end up with a hard Brexit and WTO tariffs, that would have a penalty of 16c a litre. We will not get a recovery in the marketplace to combat that. The cheese industry, mushroom industry, beef industry, and to a lesser extent butter will see the biggest hits. It will have a profound impact on the economy and agri-business industry,” Mr Woulfe said.

He said it was critical that the major cheesemakers had to work together with the Department of Agriculture, Ornua, Enterprise Ireland and Bord Bia. Mr Woulfe said talk of opportunities in the financial and IT sectors were of little comfort to rural Ireland, which was facing a crisis.

“The potential gains on finances and IT will do nothing to offset what will happen to rural Ireland in every zone. What can financial services do for the people at the foot of the Galtee Mountains? We have to wake up and realise,” he said.

Dairygold has experts for Brexit preparations but the problem was no solutions were forthcoming as long as the political situation stayed so uncertain between the UK and EU, he said.


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