Ornua CEO Conor Galvin has warned that lower-priced grass-fed butter entering the US market could erode the premium commanded by Kerrygold, as concerns grow over the long-term impact on Irish dairy farmers.

Speaking at an Irish Farmers' Association )(IFA dairy meeting in Enniscorthy, Co Wexford, on Monday night, Galvin said losing the premium associated with Kerrygold could have lasting consequences for the Irish dairy sector.

He reassured dairy farmers that Ornua is growing in value, highlighting that in 2025, Kerrygold delivered €1.8bn in sales, while in 2022 this figure stood at €1.2bn.

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“If we lose the premiums that we're getting from the products that we're selling, it's very hard to get them back. It's probably impossible,” he said.

Responding to questions about Tirlán’s move to supply Costco with cheaper own-brand butter in the US, Galvin acknowledged that companies are entitled to compete, but warned that lower-priced grass-fed alternatives could undermine the premium position and price of Kerrygold and Irish butter as a whole.

He said there is a challenge when we start to eliminate the premium at the retail level and then that filters all the way back to the value chain to the farmer.

Galvin said Ornua’s focus was on protecting and growing Kerrygold’s premium for the long term through innovation and market development, rather than putting its value at risk through price competition.

“For grass-fed butter, which is unique, it's produced on family farms here in Ireland, it has a security, it has a provenance. We need to be charging the maximum premium that we can afford,” he said.

History repeating itself

IFA dairy chair Martin McElearney warned that supplying supermarket own-brand butter risked repeating the experience of the liquid milk sector, where retailers have gained significant influence over prices.

“If we look at where liquid milk was, this is liquid milk all over again to me as a dairy farmer,” he said.

McElearney described the situation as “a race to the bottom”, warning that increased reliance on own-brand products could ultimately put pressure on returns to farmers.

Despite the concerns over competition, the Ornua CEO insisted that there is no issue in terms of communications between Tirlán and Ornua, highlighting that the two companies have regular meetings.