Arrabawn to exit liquid milk sales

Due to the challenging nature of the liquid milk industry here in Ireland, Arrabawn is exploring best possible options for its liquid operations, the processor said earlier this week.

Jack Kennedy

26 August 2022

Arrabawn’s liquid milk plant in Kilconnell, Co Galway.

The Irish Farmers Journal understands that Arrabawn Dairies has sold its liquid milk sales to Aurivo Co-op. The move will see Aurivo process Arrabawn’s liquid milk for its own brands and will result in Arrabawn exiting the liquid milk sales market.

The Irish Farmers Journal understands that Arrabawn Dairies has sold its liquid milk sales to Aurivo Co-op.

The move will see Aurivo process Arrabawn’s liquid milk for its own brands and will result in Arrabawn exiting the liquid milk sales market.

It is understood that a deal has been agreed, but a long process will now begin to allow the liquid sales business to be sold to become effective in early 2023. A due diligence process will now take place and the competition authority will have to approve the move.

Arrabawn is not selling its dedicated liquid milk plant in Kilconnell, Co Galway, and is to explore an alternative use the plant and alternative roles for staff there.

An Arrabawn spokesperson said: "Subject to the sale going ahead, it is anticipated that processing at the plant will continue until summer 2023.

"Milk supply and upcoming liquid milk contracts will not be impacted by this decision.

"Arrabawn’s priority is to support all employees and suppliers during the transition. A consultation process is underway with staff to ensure all necessary supports are being provided during the transition."

The Irish Farmers Journal has contacted Aurivo for a comment.

Job losses

Local TD Denis Naughten has said that it is devastating news that the board of Arrabawn Co-op has voted to close its liquid milk plant in Kilconnell with the loss of up to 140 local jobs in rural east Galway. “This announcement is a huge blow to the staff employed both directly and indirectly, their families, particularly at a time of such economic uncertainty, as well as a vast part of the rural economy of east Galway.”

Challenging nature

When the Irish Farmers Journal contacted Arrabawn Co-op to substantiate the news earlier in the week, a spokesperson for Arrabawn said: “Due to the challenging nature of the liquid milk industry here in Ireland, Arrabawn is exploring best possible options for its liquid operations.

“Notwithstanding the sectoral challenges, Arrabawn’s liquid milk plant is a best-in-class facility and any decision on its future will be made democratically by the board, with the best interest of the co-op, its members and staff in mind.”

Arrabawn liquid milk volumes are trending downwards and proportionally are now about 9% of the total Arrabawn pool, down from 12% last year.

Arrabawn’s liquid milk business has had a turbulent time for the last few years. In 2020 Arrabawn had to recall product from its bottling plant at Kilconnell. In 2021 a restructure of the liquid business was initiated after the Food Safety Authority of Ireland (FSAI) initiated court proceedings and subsequently fined the co-op for breaches of food law.