Morning business news - September 16Monday 16 September 2013 10.53
IRISH DAIRY INDUSTRY EYES GROWTH OUTSIDE OF EUROPE - As Europe's dairy industry gears up for life after milk quotas and the liberalisation and expansion that will bring, there are fears that a French proposal to control milk supply across Europe could be entertained at EU level. The Irish Co-operative Organisation Society, or ICOS, along with farming organisations from 13 other European dairy producing countries are against the French proposals. ICOS says that forcing European farmers to reduce supply in times of market difficulty will do nothing to strengthen world markets. Last year the value of Irish dairy exports reached €1.6 billion. The volume of milk produced is set to increase by 50% by 2020.
TJ Flanagan, head of dairy policy at ICOS, says the French proposal relates to the nature of the country's dairy business, which is mostly based on the domestic market. Ireland is actually quite a small player in the global dairy market, he points out. Mr Flanagan says the industry does need to investigate the mechanisms it has to deal with volatility in the market - something which may increase with the milk quotas end. Possible measures include the use of derivatives and futures markets on a co-op or national scale.
Demand for global dairy produce is set to grow over 2% a year, Mr Flanagan says, adding that, however, the European market is stagnant. He says that 20% of Irish dairy produce is exported outside the EU, where most of the growth in the industry is.
MORNING BRIEFS - Builders merchanting and DIY group Grafton is to leave the Irish stock exchange to take up a listing on London's FTSE UK Index Series, following a number of other high-profile departures in the last two years. Grafton says this is to increase the company's profile and its suitability as an investment for UK and international investors. The group says the decision was based on the fact that it has grown and spread since its shares were listed. Three quarters of its revenue is generated in the UK and most of its development activity is taking place outside Ireland.
*** Co Tipperary based Dew Valley has won a contract to supply all McDonald's Irish restaurants with bacon. The deal is thought to be worth about €3m over five years, and will see the firm deliver up to 9 million pieces of cooked bacon to McDonald's every year. That adds up to 36 tonnes of meat a year. McDonald's has 84 Irish restaurants - these sell Irish mineral water and the chain sources all of its beef, eggs and dairy produce from Irish suppliers. It also exports Irish beef and cheese. Before the Dew Valley deal was signed, McDonald's Ireland sourced its bacon from the UK.
*** Former US Treasury Secretary, Larry Summers, has withdrawn his candidacy to succeed Ben Bernanke as head of the US Federal Reserve. He wrote to US President Barack Obama saying that any confirmation process involving him was likely to be acrimonious and would not be in the best interests of the economy. Mr Summers had been one of the front-runners for the post, along with current Fed vice-chairman Janet Yellen, who is now likely to get the job.
*** A Red C survey, carried out for Bank of Ireland Life, finds that half of Irish people between the ages of 30 and 45 have not started to save for their pension. Almost 80% of people surveyed say they would pursue further education in their retirement, and 80% also said they would like to retire early. They add that if they could retire right now, they would spend more time travelling.