It is understood that part of Glanbia’s liquid milk contract with Tesco will be lost to two suppliers, namely Arrabawn and Aurivo. The contract is for Tesco’s own label milk and does not affect Glanbia’s Avonmore brand.

Arrabawn and Aurivo won a portion of the Tesco own brand liquid milk contract through a tendering process.

The latest tender result will see Glanbia, Arrawbawn and Aurivo share the milk pool for Tesco’s own label brand.

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A spokesman for Glanbia said it would not comment on any commercial deal.

"Glanbia Consumer Products is the leading supplier of branded consumer dairy products to the Irish market. It also supplies private label liquid milk to the Irish market and produces long life dairy products for export. Glanbia Consumer Products does not comment on commercial arrangements with individual customers, including pricing or contractual matters, which are commercially sensitive."

Liquid milk market

Glanbia has in the region of 40% of the country’s liquid milk market. Liquid milk production takes place at its Ballitore, Co Kildare and Drogheda, Co Louth facilities. Aurivo, Arrabawn, Strathroy and LacPatrick (formerly Town of Monaghan) are the other main liquid milk processors in the country.

Just 10% of dairy farmers are liquid milk suppliers as opposed to supplying milk for manufacturing products such as butter and cheese. Liquid milk suppliers have a contract to supply milk 365 days a year.