Ireland’s Ornua, the owner of the world-renowned Kerrygold dairy brand, has stockpiled tens of thousands of tonnes of cheese in the UK ahead of a potential no-deal Brexit.
Ornua CEO John Jordan said that, even if there is a major Brexit-related trade disruption, the decision to stockpile almost 40,000 tonnes of product, most of which is cheese, could allow the company to supply customers in the UK for around six months.
“We’ve somewhere between four to six months’ worth of stock relocated into the UK,” Jordan told the Irish Times.
Under a tariff regime announced by the UK government, if the UK crashes out of the EU without a deal, every tonne of cheddar imported to the country would be subject to a tariff of €221 (£189), while €600 (£512) would be applied to every tonne of imported butter.
This could result in tens of millions in additional costs per year for the Irish cheddar sector — something that would force Irish producers to increase prices significantly in the UK.
Jordan said the tariffs would cost his company €55m (£47m). Even in the event of a soft Brexit, Ornua said that the administrative burden of dealing with this type of scenario could add as much as 8% to the company’s costs.
The company reported its latest annual results on Wednesday, noting that the UK “remains a key strategic market.”
Ornua reported higher revenue and operating profits for 2018, pointing to increased dairy prices.
Turnover for last year rose by 0.6% to just over €2bn (£1.7bn), while operating profit jumped by 14.8% on 2017 to €40.4m (£34.5m).
Kerrygold is also now the fastest-selling food and drink product in Germany.