There is talk of further consolidation in the Irish dairy co-op sector, with reports that Cork-based Dairygold is open for merger talks with fellow co-ops.
The dairy industry is facing uncertain times as it awaits the outcome of Brexit, which could disrupt cross-border operations in the all-Ireland economy.
Irish newspapers have quoted Dairygold chief executive Jim Woulfe saying: “We’re open to reshaping and reforming if there’s betterment for our members.”
He added: “When we can take out costs, we’ll take out costs, and we’ll collaborate with whoever to take out costs,” he explained.
Chairman John O’Gorman said Dairygold had always been open to collaboration. In 2014 it approached Tipperary animal feed and dairy group Arrabawn Co-op over a possible merger. Dairygold itself was formed by a 1990 merger between Ballyclough and Mitchelstown co-ops.
But Mr O’Gorman said any new merger would have to consider the value of the Dairygold name to its members; Mr Woulfe added this would be a “barrier” in any merger and added no talks are currently in progress.
Dairygold also warned of Brexit uncertainty overshadowing the market, and called for a transition period long enough for businesses to prepare for a new trading relationship between the EU and the UK.
“Even then, the dairy industry will suffer serious consequences in the event significant tariffs applying,” Dairygold told the Irish Independent.
Related: Brexit Q&A with Irish co-op body ICOS
Just days after Dairygold raised the possibility, Lakeland Dairies Co-operative and LacPatrick Co-operative formally completing their merger together.
The deal leaves Lakeland Dairies the second largest dairy processor on the island of Ireland with a cross-border milk pool of 1.8bn litres, produced by 3,200 farms from a catchment area covering 16 counties. The co-operative will have a combined annual turnover in excess of €1bn.
The merger was approved by competition watchdogs last month, after a consultation held at the start of the year.
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