Fonterra food scare good for Irish milk industry

Ireland’s Agriculture & Food Minister says Irish dairy companies gained new business off New Zealand during Fonterra’s food scare crisis last year.

Simon Coveney has been in New Zealand to learn how Ireland could also become a global dairy giant.

Mr Coveney told TVNZ’s Q+A programme, that at the time of the food crisis, customers were worried about relying on New Zealand suppliers:

“At the time of that difficulty I had a number of trade missions at the time. One was to the Middle East, and people were starting to say to me, look we source a lot from New Zealand, we like New Zealand we like Fonterra, we think they give us very good product, but we think we're overly reliant on one supplier. And so a lot of countries are now looking at Ireland as a second supplier in case something goes wrong with their primary supply source.”

Customers want to know farmers’ carbon footprint

Mr Coveney said all Irish dairy farmers are independently audited to determine their carbon footprint. He believes New Zealand farmers will eventually have to do the same – because it’s what customers want.

“ You're not yet at a stage of measuring carbon footprint on farm level, like we are, but I suspect you'll go down that route in the not too distant future, because I think it'll be demanded by some of the markets that you supply into, not all of them. And one of the reasons why Ireland has gone down this route before New Zealand is the markets that we supply in the European Union primarily demand this. You're supplying markets into Asia, into China, into Africa, and consumers and buyers in that part of the world are not demanding this type of proof of sustainability yet, but they will in time.”

He thinks New Zealand food standards are good but the dominance of one large dairy company is a risk:

“We have the opposite problem in Ireland. We have probably too many dairy processors, and so we don’t get the same economies of scale that Fonterra has, we don’t have the same negotiating capacity because of the scale that Fonterra has. The danger of having a reliance on one big player though, is if something goes wrong everybody in the world associates Fonterra with the entire dairy industry of New Zealand.”

See the full Q+A interview on the website: http://tvnz.co.nz/q-and-a-news/ta-tvnz-index-group-2556429

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