Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context

I thank the Ceann Comhairle for selecting the issue and I thank the Minister of State for taking the question. Despite the excellent growth and export figures for the food industry, there has been an alarming trend in recent years whereby several key food manufacturing centres have closed down. This trend has serious consequences for food security. We are an island nation but despite our access to European markets and strong transport links to Europe, the volcanic ash cloud incident and the ice and snow last winter showed us that it is not difficult to shut down these links for a period.

On 19 January, it was announced that the Odlums industrial-sized flour mill on Alexandra Road would be closed by the parent company, Valeo Foods. My sympathies go to the workers and their families. Many of these families had worked for several generations in the flour milling industry.

This is the last remaining industrial bread flour mill in the State since the Odlums Cork mill closed in 2009. Bolands Mills and Dock Milling have closed as has the mill in Portlaoise and several other mills throughout the country. We are left with a single mill. The mill in Dublin Port has been in operation since 1920, producing 17,000 tonnes of flour annually. From the end of March most bread in Ireland will be made from imported flour. This is a serious issue for bread makers and consumers. It reduces their choice and has a possible implication for pricing. For many years the flour industry has suffered from dumping of over-produced flour, especially from the British market, making some of our flour mills uneconomical. The costs may not become clear for years but we have seen in the case of Irish Sugar that losing these strategic industries results in a loss of skills that cannot be replaced easily. A similar problem occurred in the case of SR Technics. These skills have been developed over many decades and we are now facing the closure of the final remaining mill. For a country that places such pride in its food, it is bizarre that we will now be reliant on flour from the United Kingdom for most of our bread which is a key part of almost every Irish person's diet.

Shane McEntee (Meath East, Fine Gael)
Link to this: Individually | In context

I am replying on behalf of my colleague, the Minister, Deputy Simon Coveney. I thank my colleague, Deputy Humphreys, for raising this important issue for discussion. I consider the maintenance of an efficient and viable cereals sector in Ireland to be of the utmost importance. In addition to providing an income for growers, it provides the livestock sector with a key source of feeding stuffs.

The EU cereal harvest for 2011 is estimated at 281 million tonnes, somewhat above the five year average, with a marginal reduction in stock levels. World cereal stock levels are forecast to remain unchanged due to balanced global consumption and production. World cereal prices peaked during 2011 but have fallen back in recent months due to increased market concerns about the global financial crisis. In Ireland, the 2011 cereals harvest was one of the best harvests in years, estimated at 2.5 million tonnes, some 22% above the 2010 production levels and well above the long-term average of 2 million tonnes. This record production was due to a combination of factors including an increased cereals area and favourable weather conditions during the growing and harvest seasons, although this did not apply to the people of Donegal who had a hard time of it. National cereal yields in 2011 were the highest recorded for winter and spring barley, with yields of 9 tonnes and 7.5 tonnes per hectare respectively and second highest for winter and spring wheat with yields of 10.2 tonnes and 8.3 tonnes per hectare. Production costs increased during the year but cereal prices remained strong, especially for those who opted for forward selling, with malting barley prices performing especially well. As a result of outstanding yields and good prices, Teagasc estimates an increase of 10% in the acreage sown for winter cereals.

The cereal sector is now entering a period of new market-led opportunities but these are set against significant challenges, including commodity prices trends, the security of food and energy supplies, environmental sustainability and climate change. Against this background, the goals for the sector are to improve competitiveness, profitability and sustainability by increasing yields and to improve product quality while reducing production costs. Achieving these goals will be underpinned by advances in science through knowledge generation and procurement, technological developments and innovation. In this regard Teagasc is providing research, training and advisory services for the sector.

Odlums has a long history in Ireland and has been milling and packing flour for more than 160 years. The original business was established in Portlaoise by the Odlums family in 1845 and has been owned by Valeo Foods since September 2010. The decision by Odlums to close the Dublin Port mill is commercial, taking account of the current challenging market conditions in the industrial bakery flour market. According to Odlums, the mill has been loss-making and unable to compete with low-cost imports especially from Northern Ireland and the United Kingdom.

The company has stated that there is significant excess milling capacity in the United Kingdom which is imported into the Irish market at prices with which Odlums cannot compete. The company continues to produce retail and "at home" baking products in its mill in Portarlington. It points out that locally grown milling wheat remains the major source of wheat for all products produced at Portarlington.

I regret the announcement by Odlums to close the Dublin Port mill and the loss of jobs. However, the Deputy will appreciate that Odlums is a private enterprise and, accordingly, its decision to close the Dublin Port mill is a matter for commercial decision and neither I nor my Government colleagues have any function in that regard.

Kevin Humphreys (Dublin South East, Labour)
Link to this: Individually | In context

I thank the Minister of State for his response. I accept the Minister of State's answer and that there has been low-cost dumping in Ireland and that this has greatly undermined flour milling in the country. However, there has also been a lack of investment in the Odlums mill and I hope this will not be replicated in Portarlington because then we would see the Portarlington flour mill close down.

One issue that concerns me is the recurring names that show up every time in respect of the closure of Irish Sugar, the closure of Jacob's and the transfer of all the brand names abroad. These names have surfaced again. Unfortunately, one such recurring name has been appointed to Bord Bia. There is a concern that we will be left with brand names only and no production. There will be Odlums flour in packages produced in Ireland. Most people who go into the supermarket and see a bag of sugar with the label "Sucra" believe it is manufactured here and people continue to believe that Jacob's biscuits are manufactured in Tallaght. More and more we are losing our brand names abroad and the Government should have concerns in this regard. We cannot continue to lose brand names without keeping the manufacturing plants here. I put it sincerely to the Minister of State that he should examine the names that crop up continually from Irish Sugar to Jacob's and through to the closure of this plant. There is a serious concern in this regard. I call on the Minister of State to take this on board and to investigate the matter further.

Shane McEntee (Meath East, Fine Gael)
Link to this: Individually | In context

I appreciate what Deputy Humphreys has said and I am totally in agreement in respect of what is happening. One educational step is to encourage people to buy local and locally sourced products. A survey was carried out in England as part of which people were asked about their preferred source of food. They indicated that they would prefer to source it locally. I fully agree with the Deputy's comments. It is time there was a serious and proper debate held in the House on what products we buy and support. I take on board everything the Deputy has said and I will discuss the matter with the Minister.