• The IDB to supply butter to Tesco on four markets
  • Sees deal as key ahead of end to EU quotas in 2015 

Irish co-op The Irish Dairy Board is to supply own-label butter to Tesco stores in four markets in central and eastern Europe.

The IDB said the EUR20m (US$25.6m) deal will see it produce private-label products for Tesco in the Czech Republic, Poland, Slovakia and Hungary.

Kevin Lane, the co-op's chief executive, said the contract was a "key new route to market" before the end of EU quotas on dairy production in 2015.

"This partnership with Tesco will help us on our journey to ensure that we meet our international export and growth objectives and feeds into our strategy of significantly growing new sales into new geographies and markets," Lane said. "We're confident that this exciting new growth initiative with Tesco can be built on further in the years to come."

In an interview last month at the SIAL trade show, Fergal McGarry, the IDB's global marketing and innovation director, told just-food the co-op's main target markets were Africa, Russia and China.

Show the press release

 

The Irish Dairy Board (IDB) today announced a major contract with Tesco worth €20m for the supply of packet butter during 2012/13. 

The deal sees the IDB supplying own brand butter to Tesco's European stores in Poland, the Czech Republic, Slovakia and Hungary. The average growth of dairy consumption across these four markets is 5.1% versus the EU average of 1%.  Poland is the fourth biggest butter market in the EU and combined, these four markets consume 22 times the amount of butter consumed in Ireland. This announcement represents a significant advancement for the Irish dairy industry in these key markets. 

Speaking at the announcement today, Minister for Agriculture, Food and the Marine, Simon Coveney TD said:  ‘This new butter contract marks another successful milestone for the agri-food sector as part of expansion envisaged in Food Harvest 2020. It’s heartening to see this sector announce positive news stories as it continues to achieve real growth despite a volatile global environment.  Developing new routes to market is a crucial component of our strategy under Food Harvest 2020 and I congratulate the IDB and Tesco on their ongoing commitment to the roles they play in working to achieve our country’s export growth potential.’

Commenting on the contract Kevin Lane, CEO, IDB said, ‘Today’s announcement represents a key new route to market for the IDB as we prepare for the expansion of milk volumes ahead of the removal of milk quotas in 2015. This partnership with Tesco will help us on our journey to ensure that we meet our international export and growth objectives and feeds into our strategy of significantly growing new sales into new geographies and markets.  We’re confident that this exciting new growth initiative with Tesco can be built on further in the years to come.’ 

Tony Keohane, CEO, Tesco Ireland said, ‘With over €700m worth of Irish food exported to Tesco internationally including 13% of all dairy exports, today’s announcement reaffirms Tesco as a very significant buyer of Irish food. We are continuing to explore new export opportunities for Irish products from established exporters and emerging SMEs.’

The announcement is the latest in a series of new market developments for the IDB who is responsible for just under €1bn worth of dairy product exports from Ireland annually.

 

Original source: The Irish Dairy Board