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Tesco strikes £16M deal with Irish Dairy Board

By Lorraine Mullaney , 19-Nov-2012
Last updated on 19-Nov-2012 at 13:03 GMT

Tesco's deal with the Irish Dairy Board will see Irish butter sold in Tesco's stores throughout Europe
Tesco's deal with the Irish Dairy Board will see Irish butter sold in Tesco's stores throughout Europe

Tesco announced a £16M (€20M) contract with the Irish Dairy Board (IDB) last week (November 14) to supply Irish butter to Tesco stores throughout Europe.

The butter will be produced in Ireland, packaged in Germany and supplied to Tesco stores in Poland, the Czech Republic, Slovakia and Hungary.

Tesco says 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.

Speaking at the announcement, Simon Coveney, minister for agriculture, food and the marine, said:  “It’s heartening to see this sector announce positive news stories as it continues to achieve real growth despite a volatile global environment. 

Export growth potential

“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.”

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 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.”

Dairy exports

Tony Keohane, ceo Tesco Ireland, said: “With over €700M [£562] 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, which is responsible for just under €1bn worth of dairy product exports from Ireland annually.

Food and drink exports from the Republic of Ireland soared by €1bn or 12% to reach €8.85bn last year, according to Bord Bia – the Irish Food Board.

Performance was driven by dairy and dairy ingredients exports up by 17% (€2.6bn), seafood exports up 13%, (€420M) and prepared foods up 12% (€1.5bn) compared with the previous year.

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