Brexit: Irish dairy industry facing £47m hit if UK crashes out of the EU
The Republic's biggest exporter of dairy products has said it faces an extra €23m (£19.7m) in export costs into the UK market in a crash-out Brexit where harsh tariffs are imposed.
Across the dairy sector, the tariff hit will be €55m (£47m), Ornua said.
John Jordan, chief executive of the Kerrygold butter owner, warned the challenge will be competitiveness in the UK marketplace, with "significant" consumer inflation expected.
In terms of Brexit exposure, he said Ornua was facing a 6% to 8% increase in the cost base in the case of a no-tariff Brexit.
"That will be very difficult to recover from the marketplace," said Mr Jordan as he unveiled his first Ornua annual report since becoming chief executive.
He said it was "disappointing" that Brexit was going so close to the wire, with 18% of the group's sales in value terms going into the UK.
Ornua trading and ingredients managing director Joe Collins said global demand in 2019 is set to grow by between 1% to 1.5%.
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But dairy prices are extremely volatile.
"Butter has actually been the most volatile commodity in the world, even more volatile than even oil," he said, adding the trade wars and Brexit have added to that unpredictability.
"It has swung around by around 65% from highs to lows in the last 12 months."
Meanwhile, Mr Jordan said that UK retailers do not want to see price inflation but it was "inevitable" in a Brexit scenario where they import so much of their produce.
It comes as Ornua revealed a boost in both revenue and operating profits, with Kerrygold butter recording a "standout" year as the number two butter brand in the US, delivering 25% volume growth with 2.6 million packets sold a week.
Overall group turnover reached €2.1bn (£1.8bn), with an operating profit of €40.4m (£34.5m) - up almost 15% year-on-year.
The harsh spring weather followed by drought conditions later in 2018, combined with Brexit planning, saw the group carrying additional stock over the year-end, which brought debt to €110.1m (£94m).
Mr Jordan highlighted a strong trading performance in a year marked by highly volatile butter prices, drought conditions in Europe and economic uncertainty due to Brexit and global trade wars.
Ornua purchased 570 million litres of milk equivalent under fixed price contracts, which helped co-ops protect dairy farmers against volatility.