Russian threat to Irish dairy exports

WHILE Irish infant formula has been a success story in China since the milk scandal there in 2008, Ian Lahiffe feels there could be challenges down the line that may halt this country’s success in the Chinese dairy market,

According to Ian, the Russians could soon be one of our major competitors in China as they make a surge towards building megafarms.

“The biggest impact on Ireland would be the Russians’ mega-farms to build their own dairy industry — they have a huge advantage in terms of price and forage,” he said.

He added that New Zealand milk processing giant Fonterra’s control over world milk price means it will be difficult for Ireland to gain a strong foothold in the Chinese market.

“Fonterra control the world milk price and have such a close connection with the Chinese and have factories there.

“They are the biggest supplier of dairy to China and will continue to be.”

Capacity

Last month, China released a governmental plan to implement structural reform of the dairy sector over the next two years and aims to increase production capacity.

However, Ian feels that since the “domestic dairy industry is getting smaller in China”, this plan won’t affect Ireland or other countries exporting there.