Strathroy Dairy will grow its milk pool in the Republic by around 10pc this year despite the challenges posed by Brexit.
Company director Ruairi Cunningham predicted that the Omagh-based operator will purchase close to 110 million litres from the South this year – up around 10 million litres on 2018.
Mr Cunningham said the bulk of this growth will come from increased production by existing Strathroy farmers, but said that the company was also continuing to attract new suppliers south of the border.
Strathroy currently can utilise milk from anywhere on the island for most of its customer base. However, this could change in the event of a hard Brexit, Mr Cunningham explained.
He said the dairy has contracts in the Republic for 90 million litres of milk, so supplies to meet these contracts will be taken North for processing, with the remainder of the company’s milk pool in the Republic traded to other processors.
Speaking to the Farming Independent this week, Mr Cunningham said Strathroy planned to utilise EU Special Procedures to deal with the threat of possible Brexit-related tariffs. Discussions with Revenue in the Republic have been very positive.
He explained that the Special Procedures would see Strathroy pay tariffs roughly based on the cost of processing the milk that originated in the Republic and was subsequently sold by retailers in the South.
This agreement is crucial for Strathroy, which has supply contracts with some of the Republic’s leading multiples.
He accepted that the arrangements agreed with Revenue would involve additional costs but the Strathroy director said they were a “damn sight better than WTO tariffs” and significantly cheaper than having to establish an additional processing operation in the Republic.
Mr Cunningham was scathing of the manner in which Brexit has been handled.
“Politics in the UK is a car crash. If it wasn’t so serious it would be laughable,” he said. We are dealing with the distraction of Brexit when we should be growing our business and returning strong prices to our suppliers.”
Strathroy Dairy directly employs around 150 people in the North, and a further 50 in the South.