Embattled Irish dairy industry causes 500 job cuts at Dairygold

Related tags Irish dairy Milk Dairy product

Irish dairy co-operative, Dairygold, has announced 500 jobs are to
be lost from its work-force of 3000. The company says that heavy
financial losses in the year has led to the large cull in jobs, and
in the near future more jobs are expected to be cut.

The news which was announced on Wednesday of last week in the company's newsletter, stated that the action is "absolutely essential for Dairygold's survival".​ In 2002 the company's net losses were €3.4 million and its operating profits dropped 80 per cent. Financial pressures such as these have forced the company into some sort of action, spectators believe.

Earlier in the year Jerry Henchy, the company's chief executive, urged trade unions to brace themselves for job losses at the co-operative. He said earlier in the year that he wishes the company to re-establish long-term profitability.

A government and industry strategic development plan, that was commissioned earlier in the year said that the problem facing the Irish dairy was largely caused by falling milk prices, increasing costs of production and restrictions on increasing output.

The plan implied that Ireland had relied more heavily on EU intervention than any other EU country and that the withdrawal of this intervention has caused problems in the industry.

Over the last four years, for example, Ireland accounted for between 27 per cent and 35 per cent of total EU butter intervention while only accounting for between 7 and 8 per cent of total EU milk production. The development plan pointed out that the Irish industry need to look at new markets and prepare for a time when the industry is not as dependent on EU intervention.

Henchy, however, believes that last year dairy returns in the co-operative fell more dramatically than milk prices. He believes that the dairy industry has seen problems emerge from the continuing downward pressure on returns and the reduction in EU support, as well as the impact of the currency exchange against the dollar and sterling.

At some points last year the price that the dairy products was sold on the international marketplace was lower than the cost of the Irish dairy industry to produce them. It is external factors such as these which has landed the company in difficulties.

Speculators in the Irish dairy market believe that as many as 1,500 jobs could be cut from the dairy group in the near future. This figure would amount to around half of its work force.

"We must look to the future and fix the business if there are any areas which we cannot fix, the options are stark. It's either fix it. Outsource it. Shut it or sell it,"​ the company added.

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