Oireachtas Joint and Select Committees

Tuesday, 26 March 2013

Joint Oireachtas Committee on Agriculture, Food and the Marine

Groceries Sector: Discussion with Musgrave Group and Tesco

4:15 pm

Ms Edel Clancy:

I want to say a few words about milk. As I mentioned earlier, the Musgrave Group has a policy to source 100% National Dairy Council milk. We do not source from one supplier and, in fact, we are the only operator that has a local strategy in this regard. We have regional suppliers, namely, Glanbia, North Cork Co-op, Wexford Creameries, Donegal Co-op, Clona Dairies, Connacht Gold, Dawn and Arrabawn. That is important because 25% of the milk market here comes from Northern Ireland. There is a good reason for that, which is that it is cheaper. We have turned our back on that, however, and will continue to source 100% NDC approved milk.

The Deputy talked about own-brand and branded milk, but the dynamics of the market have completely changed in terms of milk purchasing these days. The vast majority of milk bought now is two-litre own brand. We are paying the same for branded or own-brand milk, so I wanted to clarify that point.

The question of contracts was also raised. We have a structured process for negotiating with suppliers and we agree terms. After that we do not change terms unilaterally or retrospectively. However, as Mr. Allen said, there is an ongoing relationship with the supplier. Market changes evolve and consumer tastes change. As we go through the year we would have ongoing conversations and engagements with suppliers. If we have to change a promotion we will go back to discuss and negotiate it with the supplier. We do not do it unilaterally.