Ireland-The dairy industry.

IRELAND-THE DAIRY INDUSTRY.

Serious differences have emerged among dairy industry stakeholders about the future structure of the industry in Ireland.

While Glanbia managing director John Maloney has called for serious consolidation within the processing industry, senior officials of the Irish Co-operative Organisation Society (ICOS) are pushing for restructuring.

ICOS insists the time for restructuring is now, while dairy prices are at a low. However, its president, Pat McLoughlin, has ruled out rationalisation at this time and is instead pushing its Milk Ireland strategy.

Mr Maloney’s call for consolidation comes on the back of a profit warning -- issued by Glanbia last Thursday -- prompted by depressed milk prices. He said if consolidation didn’t happen this year, it would never happen.

"These are difficult times for the global dairy sector with market prices at historic lows. In the longer-term, we are confident of Ireland’s ability to have a sustainable and profitable dairy sector, but this will require restructuring across the industry," Mr Maloney said.

At a dairy strategy seminar organised by ICOS in Citywest on Friday, Bent Juul Sorensen, the chairman of the Danish dairy board and board member of Arla Foods, called for more openness on milk prices. He also called for more co-operation between the co-ops.

"A home market, where the co-ops are fighting, is not a good situation. There is always a loser -- usually the farmer," he said.

"You must decide. You don’t need to fight with each other, you need to work together.

"There’s only one way to do that and that’s to have a common money box," he added.

Mr Sorensen said a co-op had to remember that it was firstly a business. He said "feelings, employees and history" were only secondary to this.

When asked what had driven the merger of the co-ops in Denmark, he responded: "Information, information and information on opportunities."

Meanwhile, IFA president Padraig Walshe has called on the co-op boards to take decisive action before the summer. He said substantial savings and value could be delivered -- in the best long-term interest of Irish farmers -- if action was taken by the co-ops to restructure the Irish dairy industry.

"We must understand that, in the international market in which we compete, there cannot be guarantees that a restructured industry will return permanently higher milk prices.

"However, Arla have shown us what we need to compete with, and have proven that we can do so successfully, just like they have, through a farmer-owned and farmer-controlled co-op structure," he said.

Mr Walshe said industry stakeholders here needed to take inspiration from their European competitors and work to change the mindset at every level in the co-ops.

"To position the Irish dairy industry as an efficient, and diversified international competitor, we need to focus our energies on achieving maximum savings and marketing opportunities through the best industry structure," he added.

Friday’s dairy strategy seminar was the first of a number which are being organised by ICOS. A further meeting takes place in Portlaoise this Friday.

- Majella O’Sullivan