NATIONAL MILK AGENCY The Fresh Liquid Milk Sector 2013 General Overview Mr. Denis Murphy Chairman

IRISH DAIRY SECTOR 2013 Record year despite adverse spring weather conditions Domestic milk supplies – 5,420 million litres + 4% on % for manufacturing – mainly export markets 8% for liquid consumption on domestic market Average producer price for manufacturing milk 38 c/l + 7 c/l on

DOMESTIC FRESH MILK MARKET 2013 Consumption of fresh milk 565 million litres + 0.4% on 2012 Per capita consumption 0.34 litres per day – second highest in the EU 74% market share for domestic supplies 26% market share for imported milk (packaged and bulk) Retailers distribute 79% of all fresh milk, catering 11%, doorstep 10% 2

DOMESTIC FRESH MILK MARKET – PRICES 2013 Average retail price of fresh milk – 94 c/l + 1 c/l on 2012 Average producer price for fresh liquid milk – 39 c/l + 5 c/l on 2012 Producer price for liquid milk now mainly linked to monthly manufacturing milk prices plus a winter premium Differential between average producer price for liquid milk and producer price for manufacturing milk < 1 c/l (average 4 c/l over 19 years) 3

STRUCTURE OF DOMESTIC FRESH MILK MARKET 2013 Retailers – 5 largest groups – 93% share of grocery market (70% share of milk market) Processors - 5 largest – 91% of registered milk supplies Producers largest – 30% of registered producers supply 60% of registered supplies 4

REGISTERED CONTRACTS/ REGISTERED SUPPLIES 2012/13 1,883 registered producers with contracts 10% of all milk producers in the State Supply 16% of domestic milk supplies Total milk supplies – 830 ml – 55% liquid and 45% manufacture Winter supplies/liquid consumption cover – 132% in 5 prescribed winter months Winter supplies/liquid consumption cover – 127% in December/January 5

MILK SUPPLIES/CONTRACTS OF ACTIVE REGISTERED PRODUCERS 2002/03 – 2012/

SUPPLY COVER FOR LIQUID CONSUMPTION PRESCRIBED MONTHS OCT – FEB 2002/03 – 2013/14 7

ABOLITION OF EU MILK QUOTAS IN APRIL 2015 An opportunity and challenge Projected increase of 50% in domestic milk supplies by all destined for export markets Increased volatility in milk prices Will change the structure, scale and systems of milk production, processing and marketing in the State 8

NATIONAL MILK AGENCY ANNUAL REPORT 2013 Dr. Muiris Ó Céidigh Chief Executive

10 CLASSIFICATION OF REGISTERED CONTRACTS BY TYPE CONTRACTSSUPPLIES 2012/132011/122012/132011/12 No.% % %m/l% AYR 1,769941, Winter Total 1, ,

ALL YEAR ROUND CONTRACTS 11

LIQUID MILK PRICES UNDER MMP SYSTEM v MANUFACTURING MILK PRICES – Calendar YearsPrices – Liquid 1 Prices – Manufacturing 1 Price Differential c/l Sources NMA/CSO 1 Prices excluding vat, before levies and after collection charges AVERAGE- 19 years

13 PRICES PAID UNDER ALL CONTRACTS AND PRICING SYSTEMS Period2012/132011/12 1,883 Contracts 455 m. litres 1,936 Contracts 435 m. litres c/l Winter Months Sept – Mar (7) Summer Months April – Aug (5) Average Increase 3.4 c/litre * Manufacturing prices down by 8 c/l since January 2014

14 STRUCTURE OF REGISTERED PRODUCERS BY REGISTERED PROCESSORS’ SUPPLY BANDS 2012/13 MILK SUPPLY BANDS NO. OF PROCESSORS REGISTERED PRODUCERS TOTAL SUPPLIES m. litresNo. %m. litres% Over 4021, Total151,

15 MILK IMPORTS (BULK AND PACKAGED) FOR LIQUID CONSUMPTION ‘97‘98‘99‘00‘01‘02‘03‘04‘05‘06‘07‘08‘09‘10‘11‘12‘13 millions of litres Bulk Packaged Total Imports

MILK IMPORTS (BULK & PACKAGED) FOR LIQUID CONSUMPTION Market Share of total Imports 26%

17 MARKET PENETRATION OF DOMESTIC LIQUID MILK MARKET BY IMPORTS Market Share of Imports 24%

18 NORTHERN IRELAND MILK SUPPLIES MILK SUPPLIES Millions of litresIndex , , , , , , , , , , , , Up 53% since 1993

19 GROCERY MARKET SHARES %%%%%% Tesco Dunnes SuperValu Superquinn Lidl/Aldi Centra Spar All Others Total100 Lidl, Aldi & Musgrave Group (Superquinn, Supervalu & Centra) up, Tesco & Dunnes Stores down

NATIONAL MILK AGENCY Thank You