Demand for foreign cheese creates competitive pressures that make British dairy more efficient, says Carl Ravenhall
As managing director of the Kerrygold Company, the UK's biggest supplier of cheese to the major multiples, I read far too often that 'cheap imports' are damaging the British dairy industry.
This is a myth I feel compelled to dispel. The Kerrygold Company is a market-focused business that sources what its customers need. This need is driven by consumer demand for cheese that is good value and good quality. To meet this need, we source cheese from a diverse range of overseas and British producers.
As a worldwide purchaser of cheese, we at The Kerrygold Company know that the imported cheese we source is of excellent quality and consistency, as is the British cheese.
The fact we have won as many awards for our imported cheese as we have for our British cheese is testament to this.
There has been much talk about the importance of provenance to the consumer, but research published in The Grocer's recent Dairymen supplement showed this is not the case. Only 7% of consumers ranked 'UK-produced' as the most important criterion when purchasing dairy products. This raises questions over whether the consumer's preference for British cheese is as great as some would like to make out.
In my opinion, the reason for the volume of cheese imports to Britain is a simple one of supply and demand. Britain does not produce enough milk to support the demands of the growing British population. This is a trend that can be seen throughout the dairy industry while demand is rising, supply from British producers continues to fall. Imports are being blamed for this trend, when for the most part their presence in the market is a result of this trend.
I believe imports have an important role to play in the industry, not just to balance the supply and demand, but also because their presence creates the competition that drives efficiency.
As was highlighted in The Dairymen, there is too much processing capacity in the UK industry that is old, inefficient or under-utilised. In my opinion, imports create the competition that will make this capacity more efficient.
A prime example of this process at work can be seen in The Kerrygold Company's new factory, which we set out to make the most efficient and environmentally friendly in Europe. We recognised the threat posed to the UK industry by the wider European supply base and the resulting improvements in process efficiency have enabled us to maintain tight cost controls without driving down prices paid to our suppliers.
At our industry-leading cheese packing facility in Leek, we are focused on adding value to the cheese we pack, regardless of its provenance. It is this addition of value to dairy products that will sustain the British dairy industry into the future.
In order for the dairy sector to be as vibrant as possible, we need to focus on keeping the industry as efficient as possible. Efficiency is driven by innovation, and innovation is inspired by a competitive market. The solution lies not in stopping imports but in every part of the British dairy supply chain becoming more efficient to compete on the world stage.
Carl Ravenhall is MD of Kerrygold.