Ornua, the owner of the world-renowned Kerrygold dairy brand which is based in Ireland, has stockpiled tens of thousands of tonnes of cheese in the United Kingdom as it makes some preparations for a potential no-deal Brexit.
John Jordan, Chief Executive Officer of Ornua CEO Ornua, said that even if there is a major trade disruption that is related to Brexit, the decision to stockpile nearly 40,000 tonnes of product, the majority of which is cheese, could allow the firm to supply its customers in the United Kingdom for approximately six months.
In an interview with the Irish Times, Jordan disclosed: “We’ve somewhere between four to six months’ worth of stock relocated into the UK.”
Under a tariff regime that was announced by the government of the United Kingdom, if Britain crashes out of the European Union without a deal, every tonne of cheddar that is imported to the country would be imposed with a tariff of €221 (£189), while €600 (£512) would be imposed on every tonne of imported butter.
This could result in tens of millions in extra costs per year for the cheddar sector of Ireland — something that would force the producers in Ireland to significantly raise prices in the United Kingdom.
Jordan said that the tariffs would cost his firm €55 million (£47 million). Even in the event of a soft Brexit, Ornua disclosed that the administrative burden of dealing with this kind of scenario could add as much as 8 percent to the costs of the company.
The firm published its latest annual results earlier today. It noted that the United Kingdom “remains a key strategic market.”
It reported higher revenue and operating profits for the previous year, pointing to higher dairy prices.
The turnover for 2018 increased by 0.6 percent to just more than €2 billion (£1.7 billion), while operating profit rose by 14.8 percent as compared to that of 2017 to €40.4 million (£34.5 million).
Kerrygold is also now considered as the fastest-selling food and drink product in Germany.