Kerry Group announced its trading update for the third quarter, and while the overall numbers are a little disappointing, the figures for the dairy division are very worrying for the wider sector in Ireland.

Dairy Ireland volumes dropped 12.1% in the July-September period, while pricing plunged 17.6%, and margin is now a negative 1.1 percentage points - meaning, the division is making a loss on what it is selling.

Edmond Scanlon, chief executive officer of Kerry, said: “Dairy Ireland continues to be impacted by challenging industry dynamics.”

The Taste and Nutrition, which makes up the vast majority of Kerry Group’s business, saw margin expand by 1.3 percentage points, with volume growth of 1.3% in the third quarter.

Overall, the performance means that Kerry is now saying that it expects its full-year earnings to come in at the lower end of its previous guidance of adjusted earnings growth of 1% to 5%.

Kerry also announced a €300m share buyback programme, which will commence at the beginning of November.

Scanlon said: “We made good strategic progress through the period with further footprint expansion and strategic acquisitions, and given the Group’s strong balance sheet and cash flow, we are also initiating a share buyback programme.”

Shares in the company had dropped 2.5% by 9:00 a.m.