Lidl and Aldi, the successful discount supermarkets with an estimated 25% share of the Irish grocery market, have been targeted by an IFA advertising campaign. The advert calls out the discounters on two grounds, namely that they carry a dairy/creamery name that doesn’t exist and also warning consumers “to be sure your milk is from the Republic of Ireland look for the NDC logo.”
The National Dairy Council (NDC) logo can only be used by dairy processors in the Republic of Ireland, and therefore milk sourced in the Republic of Ireland but processed in Northern Ireland is ineligible.
Made up dairy names
By using Irish sounding names for dairies that don’t exist, the discounters are inviting consumers to associate what is their own label milk brand with a particular dairy processing milk from Irish farms.
In fact, both the names Clonbawn Irish dairy and Coolree creamery are own label brands with no connection to a specific dairy. This will not be understood by many shoppers in Lidl and Aldi, and the IFA have a strong point in it being misleading.
This branding strategy isn’t unique to Lidl and Aldi – one of the most successful users of this strategy is Tesco in the UK, who introduced a Boswell farms brand on their own label value range beef.
Previously, the own label value range in Tesco was in unappealing packaging and the rebranding exercise has successfully created a higher value identity for the product.
The issue of looking out for the NDC logo moves into different territory. One of the processors of Irish milk is Strathroy dairies, based in Omagh, Co Tyrone. They have an island of Ireland sourcing policy and have become significant players in the liquid milk market on both sides of the border in recent years.
If where milk is processed on the island of Ireland was to become an issue, then it has the potential to take a buyer of milk from Irish farms out of the market, reducing competition in the process.
Cross border trade
Agriculture is the one area where the island of Ireland is very much a single market. That is reflected in the fact that over one-third of all milk from NI farms is processed south of the border and almost 400,000 NI lambs also go to southern factories. This provides the backbone of supply to a number of dairy and sheep processors, and arguably without that supply, less capacity would be maintained in the south.
It works the other way too. As well as the milk Strathroy bring north for processing, approximately 450,000 pigs also go north annually for processing.
Almost 50,000 beef carcases went from the south to NI in 2020 and the introduction of online selling by marts has rejuvenated the live cattle trade from marts to the North as well.
This accounted for over 64,000 cattle either direct to slaughter in NI or for finishing on NI farms.
Beef PGI example
When the debate was ongoing about the PGI grass-fed branding for Irish beef late last year, the IFA adopted an enlightened position by advocating that it apply to beef on the island of Ireland. This would ensure that NI farmers and factories remain strong buyers around the rings in west of Ireland marts, either in person or virtually.
The Irish Farmers Journal understands that it isn’t the intention of the IFA to exclude milk processed in NI, rather it is the reality of how use of NDC labelling is confined to the Republic of Ireland.
Its main concern is around the fact that supermarkets are using made up names to brand their own label offering.
Maximise options for route to market
There is, of course, huge frustration in farming circles about how large retail has the ability to devalue the produce from Irish farms. There is an issue every year with supermarkets discounting vegetables in the run up to Christmas and own brand label milk can do the same in the dairy sector.
Farm leaders are right to fight to maintain the value of produce coming from Irish farms, but need to be clever in the tactics they employ against the marketing juggernauts in the supermarket sector.
It is correct and commendable to call out misrepresentation in labelling using fictitious places that don’t exist. What should be avoided is doing anything that blocks the route to market options for produce leaving Irish farms.