The Irish Dairy Board

 

An Bord Bainne - The Irish Dairy Board - was established on the 17th May, 1961 by the then Minister for Agriculture, Mr. Paddy Smith. This followed the passing into law of the Dairy Produce Marketing Act 1961, signed by President Eamon De Valera.

This Act, in addition to paving the way for the establishment of An Bord Bainne, also provided for the dissolution of the old Butter Marketing Committee and the transfer of its functions, assets, rights, powers and privileges to the new semi-State enterprise. So began a bold experiment in centralised marketing and an important new chapter in the history of the Irish dairy industry.

Dail Éireann Marketing Bill, 1960

Extract from speech by the then Minister for Agriculture, Mr. Paddy Smith in moving the second reading of the Dairy Produce Marketing Bill 1960, Dail Debates 6th December 1960:

The main functions of the Board to be set up under this Bill - to be known as An Bord Bainne - will be to channel milk production into the most profitable manufacturing outlets to improve methods of marketing of dairy products, and to develop export markets in a systematic manner. The Board will take over the present functions of the Butter Marketing Committee in regard to the purchase, storage, sale, etc., of creamery butter. The Government will provide the Board with an annual grant, the amount of which will be negotiated each year, and the Board will be authorised to collect levies from the producers to meet the balance of its requirements.

The Board will, in principle, become the sole exporter of all dairy products, but, as some exceptions to this are desirable in the interests of the dairy industry as a whole, the Bill empowers the Minister for Agriculture to delegate from time to time export marketing functions for particular products to the manufacturers concerned. At the outset, it is proposed to leave to the individual manufacturers the export of all chocolate crumb to Britain and the Six Counties; milk powder; non-creamery butter, and some special lines of cheese. The Board would be the sole exporter of creamery butter, fresh cream, canned cream, condensed milk and cheese other than some special lines, and would also handle the export of chocolate crumb to destinations other than Britain and the Six Counties.

Section 8 of the bill sets out the constitution of the board. There will be nine members, of whom four will represent suppliers of milk to creameries, and there will be one representative each of manufacturers of cheese, milk powder and chocolate crumb, together with one representative of the Dairy Disposal Company, Limited, and one officer of my Department. I should mention that the White Paper on the Marketing of Agricultural Produce visualised a membership of eight, but, following representations made by the creamery industry, I decided to increase by one the representation of creamery milk suppliers, this additional member to be specially selected to represent the interests of creamery societies in the production of fresh cream. Otherwise no change has been made in the representation as set out in the White Paper.

Each of the representatives of creamery milk suppliers will be associated with a different group of creamery premises. One will be chosen by creamery societies in Counties Clare, Cork, Kerry, Limerick, Tipperary, Waterford, Wexford, Kilkenny and Laois.

DAIRY PRODUCE MARKETING ACT

The Dairy Produce Marketing Act 1961, as already noted, was based on the recommendations of a special committee, known as the Advisory Committee on the Marketing of Agricultural produce, which published a report in 1959. In a key passage of the report the committee stated: - ?The fundamental point to be decided is whether this country should be an exporter of whatever temporary surplus of dairy produce may arise from time to time or whether the country should be a long-term and regular exporter of dairy produce. If it is the intention that the country?s export trade in dairy produce should continue to be merely the export of whatever fluctuating surplus may arise from year to year, there would be little point in altering radically the present marketing arrangements."

The report went on to emphasise the central role of dairy product exporting in the context of the national economic growth; ?It may appear most unsound to propose increased exports of dairy produce when excess supplies of such produce have so recently been giving rise to difficulties in many parts of the world. If however, this country?s exports of dairy produce are not to exceed the level of recent years, the future outlook for the dairy industry, the cattle trade, and the country as a whole cannot be regarded with optimism. Dairying is an essential feature of the small farm framework of Irish agriculture and, in our opinion, increased milk production and an expanding dairy industry are vital to the development of a growing national economy?.

The report was followed by a White Paper on the marketing of Irish butter in Britain in 1961. The general responsibility of the new Board as stated in the Act was to ?improve and develop the marketing of milk products outside the State?. In this regard it differed from similar organisations elsewhere, such as the United Kingdom?s Milk Marketing Boards, in that it was to be exclusively an export marketing body with no function on the home market. Its broad objectives were ?to export or provide for the exportation of ? to promote, facilitate, encourage, assist, co-ordinate and develop the exportation of milk and milk products?.

Mr. Patrick Power, representing the Licenced Manufacturers of Milk Powder, was elected the Board?s first Chairman - a post which he held until his death in 1971. The first General Manager, Mr. Tony O?Reilly (now Sir Anthony O'Reilly) was appointed in April 1962 and the Secretary, Mr. Joe McGough, in May.

FIRST PROGRAMME

Looking back on those early years, Sir Anthony O?Reilly describes the mood of the farmers as assertive and confident. ?Farmer confidence was further strengthened by the ambitious cattle targets articulated in the First Programme for Economic Expansion. From then on the farming community began to cast aside many of the inhibitions and prejudices of a century of frustration and of marking time. The industry, the co-operative movement and the farmer were ready to put themselves to the test of world markets and consumer preference. Time, experiment and a great deal of Governmental support, was going to be required to achieve the ambitions of the manufacturers and the primary producers - but a good start had been made and there appeared to be few illusions about the problems that lay ahead?.

QUOTA RESTRICTION

The United Kingdom maintained a quota restriction on the quantity of Irish butter which would be imported there, totalling 12,000 tons, half of which traditionally went to Northern Ireland. (A cheese quota was never applied but a system of what was euphemistically called ?voluntary restraint? tended to have the same effect). The British market had, since its industrial revolution, been the main outlet for Irish butter.

Having equated the Irish butter volumes and U.K. quota available, the new Bord Bainne set the following marketing objectives for
the UK market :

1.      To launch a brand of Irish butter in test market.
2.      To achieve an 11% share of the test market area.
3.      To establish a strong brand image and loyalty at a premium price.
4.      To obtain maximum distribution in multiples, cooperatives and wholesalers.

Consumer research commissioned at the time by CTT (Irish Export Board), PBC (Pigs and Bacon Commission) and Bord Bainne, indicated that the Board had quite a tough job on its hands given that there was no tradition of exporting any Irish branded packaged food products from Ireland. While Ireland may have been attributed with many charming characteristics, its rating as a possible food supplier at that time was not very high. Historically, Irish butter exports went to the U.K. in bulk for blending purposes, with the result that neither a negative nor positive perception of Irish butter existed.

The Kerrygold Brand

A number of special reports were also prepared on the U.K. butter market in 1962 and the activities of competitors there. With the specific objectives set, the North West (Winterhill TV area with a population of 7 million) was chosen and the new brand ?Kerrygold?
was launched. Read here for more information on the Kerrygold brand.

OTHER MARKETS

In 1964, with the assignment of additional functions by the Minister for Agriculture, the Board enjoyed a virtual monopoly for the export of all Irish dairy products. ?Our exports of Kerrygold?, said Joe McGough, ?were extended on a world-wide basis. During the years when we were restricted by the low quota of butter into the U.K. we had to find other markets throughout the world. We commenced a trail from Gibraltar, Malta, Cyprus, the Middle East, the Gulf States, the Canary Islands, the Caribbean, the Americas and South East Asia. No two markets were the same - we had to constantly alter techniques as we went from one market to the other. Suffice to say that the experience gained in seeking these new markets later stood us in good stead. All in all we were exporting to between 15 and 20 countries at that time - a market spread which has of course quadrupled since then?.

MAIN ACHIEVEMENT

The main achievement of the Board in the 1960?s however, was the development of a distinctive brand for Irish dairy products and a strong branded presence in the British market - a presence which would be further strengthened and consolidated in the years ahead. The industry had come a long way since 1959 when the Advisory Committee urged that "as soon as a Cross Channel ferry service is available some experimental consignments of packaged Irish butter should be sent to Britain".