16 March 1999
Irish slam Milk Marque prices

MILK MARQUES auction process is artificially inflating UK milk prices, according to Ned Sullivan, managing director-designate of Glanbia, the Irish foods group.

Mr Sullivan said his group would look to achieve cost reductions by taking more of its milk directly from farmers.

The group has warned that its food ingredients business and operations supplying milk to UK supermarkets face tough market conditions.

Cost-savings in the year to 2 January from a reorganisation enabled Glanbia, formerly Avonmore Waterford, to raise pre-tax pre-exceptional profits by 25% to IR£75 million (£64m) on sales down by 3% to IR£2.3bn.

But overcapacity and reduced demand in the pigmeat business produced a disappointing result in the meat division last year and operating profits slumped by more than half to IR£6.7m from IR£5.3m last time.

Mr Sullivan said he expected a strong recovery in the pigmeat business this year.