Dairygold boss Jim Woulfe has warned that the cost of tariffs and trade disruption will ultimately be borne by farmers unless supports are put in place.
Woulfe put the cost of WTO tariffs of his co-op’s cheddar exports to the UK at €50m per year, speaking on RTE’s Prime Time on Thursday night.
He said that, in the worst case scenario of a crash-out on 29 March, tariffs of €1,671/t on Dairygold’s 30,000t of cheddar exports to the UK would amount to a tax of €50m.
Competitive
“Quite clearly, the first port of call would be you would try to pass it on to the consumer but that won’t work on the basis that the UK is a very competitive industry already so that’s unlikely.
“The business can’t afford that, we have a narrow margin industry. Primary processing and manufacturing works on 3% to 4% margin so it’s not able to carry it.
“Ultimately, it there isn’t any support or mechanism to help us in a transition period, it goes back to the producer," warned Woulfe.
Clarity
The Dairygold chief executive called for clarity and certainty from the Government that it would put supports in place to help co-ops alter their product portfolios away from cheddar to the British market.
He called for tariff rebates, aids to storage and intervention to be part of the supports.
“State aid rules will have to be looked at. We will need supports in the context of the capital investment programme. We’ll need to transition but above all we need time to do them.”
Time running out
"I am very worried about Brexit. We've got 36 days, 860 hours, to go to a Brexit where we don't know what the outcome is going to be," he added.
"It's a cliche to prepare for the worst and hope for the best but you can't run an industry on hope."
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Dairygold boss Jim Woulfe has warned that the cost of tariffs and trade disruption will ultimately be borne by farmers unless supports are put in place.
Woulfe put the cost of WTO tariffs of his co-op’s cheddar exports to the UK at €50m per year, speaking on RTE’s Prime Time on Thursday night.
He said that, in the worst case scenario of a crash-out on 29 March, tariffs of €1,671/t on Dairygold’s 30,000t of cheddar exports to the UK would amount to a tax of €50m.
Competitive
“Quite clearly, the first port of call would be you would try to pass it on to the consumer but that won’t work on the basis that the UK is a very competitive industry already so that’s unlikely.
“The business can’t afford that, we have a narrow margin industry. Primary processing and manufacturing works on 3% to 4% margin so it’s not able to carry it.
“Ultimately, it there isn’t any support or mechanism to help us in a transition period, it goes back to the producer," warned Woulfe.
Clarity
The Dairygold chief executive called for clarity and certainty from the Government that it would put supports in place to help co-ops alter their product portfolios away from cheddar to the British market.
He called for tariff rebates, aids to storage and intervention to be part of the supports.
“State aid rules will have to be looked at. We will need supports in the context of the capital investment programme. We’ll need to transition but above all we need time to do them.”
Time running out
"I am very worried about Brexit. We've got 36 days, 860 hours, to go to a Brexit where we don't know what the outcome is going to be," he added.
"It's a cliche to prepare for the worst and hope for the best but you can't run an industry on hope."
Read more
€400m threat to Irish dairy exports from no-deal Brexit tariffs
'We're in uncharted waters' - farmers react to Brazilian beef threat
Dairy markets: GDT continues price rally at latest auction
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