Zoe Kavanagh, chief executive of the National Dairy Council has slammed claims that its NDC Guarantee is 'forcing' Northern Irish milk producers out of the Republic.
Speaking to Retail Intelligence, Kavanagh said that the NDC Guarantee, which indicates milk and cream products that are both farmed and processed in the Republic, was developed in 2009, in line with both the Competition Act and the Free Movement of Goods Act.
"We took very good legal guidance, and it was found to be entirely compliant," she said. "What's frustrating at the moment is that a number of stakeholders from the Northern dairy business keep suggesting that we are under investigation from the Competition Authority and we are being anti-competitive. We're not."
As was reported in last week's Retail Intelligence, Omagh-based Strathroy Dairy told an Oireachtas Committee hearing that the NDC is being "disingenuous and is misinforming the customer" with its Guarantee, which was "launched to try to force us out of the market."
While not referencing Strathroy directly, Kavanagh stressed adamantly that this was not the case. "Anyone who fulfils the criteria of the trademark can become a licensee," she said. "There's no cherry picking of who can be in the club. We have had members who source milk from both sides of the border, and within their processing facility clearly segregate their milk, and thus can meet the criteria set out by the licensing agreement."
Kavanagh also slammed suggestions that the NDC mark was developed to operate as a price support mechanism for branded milk products. "The NDC trademark appears on both branded and own brand milk or cream," she said. "The customer is free to stand in front of the dairy fixture and choose the product that best suits them."
She added that differences in quotas between Ireland and the UK, as well as foreign exchange movements, mean that the commercial models in the Republic and the North are incomparable. "What's frustrating for me is that those facts and that pragmatic commercial discussion is getting lost. It's almost an inconvenient truth."
As to why the NDC Guarantee is being challenged now, Kavanagh suggested it is linked with a couple of high-profile retail milk supply contracts which recently went up for negotiation. "Because margins and the distribution of margins are under such pressure, when you get a contract moving, you're going to get a big reaction to it," she said. "I think what's unfortunate, is that what we're observing is a highly politicised reaction to a commercial reality."
© 2013 - Checkout Magazine by Stephen Wynne-Jones