Pro­ces­sors stock­pile ‘Ched­dar moun­tain’ as a Brexit buf­fer

Or­nua has moved six months’ sup­ply to UK ware­houses

Irish Independent - Farming - - NEWS - GAVIN MCLOUGHLIN AND DE­CLAN O’BRIEN

THE COUN­TRY’S largest ex­porter of dairy prod­ucts has moved to store over six months of Ched­dar cheese in ware­hous­ing in the UK as a Brexit buf­fer.

Cold stor­age has been at a pre­mium as Ir­ish ex­porters of Ched­dar, but­ter and pow­der move to ward off fears of de­lays port­side in the event of a ‘nodeal’ exit.

John Jor­dan, chief ex­ec­u­tive of Or­nua, said as part of its Brexit readi­ness, it has been mov­ing Ched­dar to stor­age in the UK ahead of the March 29 dead­line.

The pro­duc­tion cy­cle from March to Oc­to­ber means stocks of cheese, but­ter and pow­der are al­ways stored over the win­ter pe­riod in Ire­land.

“We’re now stor­ing in the UK, pri­mar­ily to avoid lo­gis­tics is­sues that we fore­see hap­pen­ing through early April, May and June,” said Mr Jor­dan as he at­tended a DCU Brexit In­sti­tute event.

“They’re all un­fore­seen so we’ve over­come that and we’ll have a so­lu­tion for our UK cus­tomers.”

Cur­rently over six months worth of stock is in ware­hous­ing in the UK, which amounts to around 40,000-50,000 tonnes of product.

Or­nua al­ready had a di­ver­si­fi­ca­tion strat­egy in place be­fore Brexit and its re­liance on the UK has de­creased over the past decade.

“We’ve been in­vest­ing in Ker­ry­gold for 25 years in the United States, and now Ker­ry­gold’s the num­ber two but­ter brand with tremen­dous op­por­tu­nity,” said Mr Jor­dan

How­ever, the UK re­mains a ma­jor im­porter of Ir­ish dairy pro­duce, with the trade worth around €860m. UK buy­ers take 115,000 tonnes of cheese worth €367m, and around 65,000 tonnes of but­ter worth €190m.

Agri­cul­ture Min­is­ter Michael Creed said a lot of Ir­ish com­pa­nies have been rent­ing ware­hous­ing in the UK. He said the “most lu­cra­tive” com­mod­ity cur­rently in the UK was ware­hous­ing. Mr Creed said the costs of cold stor­age were of par­tic­u­lar con­cern for smaller com­pa­nies which may be squeezed out of the mar­ket.

Di­rect routes

Mean­while, more di­rect ship­ping ca­pac­ity to the con­ti­nent needs to be put in place to safe­guard Ir­ish agri-food ex­ports should Bri­tain crash out of the EU, meat pro­ces­sors and farm lead­ers have warned.

Ire­land is overly de­pen­dent on the Bri­tish land-bridge route to the con­ti­nent and this could be se­ri­ously com­pro­mised in the event of a ‘no-deal Brexit’ at the end of March.

“We are ex­tremely con­cerned by the im­pact that Brexit could have on the land-bridge route for our ex­ports to the con­ti­nent in terms of po­ten­tial ad­di­tional cus­toms and vet­eri­nary checks and ma­jor con­ges­tion to the Dover-Calais cross­ing,” said Cor­mac Healy of Meat In­dus­try Ire­land (MII).

Mr Healy said de­lays at the English Chan­nel would im­pact on fresh meat de­liv­er­ies to meat pro­ces­sors’ Euro­pean cus­tomers and “add cost and com­plex­ity to the busi­ness”.

The MII direc­tor pointed out that around 90pc of Ir­ish meat con­sign­ments des­tined for con­ti­nen­tal Europe use the UK land-bridge, which is the fastest and most cost-ef­fi­cient route to mar­ket.

“We be­lieve that ad­di­tional ferry ca­pac­ity di­rect to the con­ti­nent will be needed. It is im­por­tant that fresh sup­plies to our con­ti­nen­tal Euro­pean cus­tomers are not dis­rupted due to Brexit.

“We are dis­cussing this with the Depart­ment of Agri­cul­ture,” Mr Healy told the Farm­ing In­de­pen­dent.

Agri­cul­ture Min­is­ter Michael Creed said any ques­tion about re­li­a­bil­ity in de­liv­er­ing to our EU mar­kets would be “big trou­ble” for Ire­land.

He pointed out the land­bridge was crit­i­cal and there have been many bi­lat­eral meet­ings car­ried out.

Mr Creed said there was suf­fi­cient ferry ca­pac­ity and ships could switch routes if re­quired.

How­ever, he pointed out in terms of time ef­fi­ciency and ex­ist­ing sup­ply chain lo­gis­tics that it was the least ef­fi­cient.

He stated it could take as lit­tle as 13 hours from Dublin to the Rungis Mar­ket in Paris via Holy­head, Dover and Calais as op­posed to more than 30 hours from Dublin to Cher­bourg via ferry.

ICSA pres­i­dent Pa­trick Kent has said the Gov­ern­ment needs to be a lot more proac­tive in en­sur­ing that we have suf­fi­cient op­tions.

He warned there was an “over-re­liance” on Dublin Port.

AD­DI­TIONAL DI­RECT FERRY CA­PAC­ITY WILL BE NEEDED IF THERE IS A HARD BREXIT

Or­nua CEO John Jor­dan says it is stock­pil­ing dairy ex­ports in the UK “to avoid lo­gis­tics is­sues that we fore­see hap­pen­ing through early April, May and June”

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