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

2. IRISH DAIRY SECTOR 2013 Record year despite adverse spring weather conditions Domestic milk supplies – 5,420 million litres + 4% on 2012 92% 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 2012 1

3. 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

4. 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

5. 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 - 581 largest – 30% of registered producers supply 60% of registered supplies 4

6. 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

7. MILK SUPPLIES/CONTRACTS OF ACTIVE REGISTERED PRODUCERS 2002/03 – 2012/13 6 854

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

9. ABOLITION OF EU MILK QUOTAS IN APRIL 2015 An opportunity and challenge Projected increase of 50% in domestic milk supplies by 2020 - 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

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

11. 10 CLASSIFICATION OF REGISTERED CONTRACTS BY TYPE CONTRACTSSUPPLIES 2012/132011/122012/132011/12 No.% % %m/l% AYR 1,769941,82494449.099428.598 Winter 114611266.116.52 Total 1,8831001,936100455.1100435.0100

12. ALL YEAR ROUND CONTRACTS 11

13. LIQUID MILK PRICES UNDER MMP SYSTEM v MANUFACTURING MILK PRICES – 1995-2013 12 Calendar YearsPrices – Liquid 1 Prices – Manufacturing 1 Price Differential c/l 199532.8429.323.52 199634.0729.264.81 199732.8526.856.00 199832.3128.373.94 199932.2027.514.69 200032.0928.213.88 200133.2629.313.95 200232.7027.065.64 200332.2626.795.47 200432.2626.845.42 200531.0026.294.71 200630.5125.365.15 200735.2832.542.74 200837.58 32.245.34 200929.1722.496.68 201032.4429.622.82 201135.5134.10 1.41 201234.1031.152.95 201338.8738.070.80 Sources NMA/CSO 1 Prices excluding vat, before levies and after collection charges AVERAGE- 19 years 33.23 29.02 4.21

14. 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) 39.0237.96 Summer Months April – Aug (5) 35.4028.52 Average37.5034.08 Increase 3.4 c/litre * Manufacturing prices down by 8 c/l since January 2014

15. 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% 0 - 201029216499 20 - 4033822010623 Over 4021,2096430068 Total151,883100455100

16. 15 MILK IMPORTS (BULK AND PACKAGED) FOR LIQUID CONSUMPTION 1997-2013 ‘97‘98‘99‘00‘01‘02‘03‘04‘05‘06‘07‘08‘09‘10‘11‘12‘13 millions of litres Bulk1645444350424855 5862635758655957 Packaged--20232426413840465059788486 89 Total Imports 164564667468899395104112122135142151145146

17. MILK IMPORTS (BULK & PACKAGED) FOR LIQUID CONSUMPTION 1996 - 2013 16 Market Share of total Imports 26%

18. 17 MARKET PENETRATION OF DOMESTIC LIQUID MILK MARKET BY IMPORTS 1996-2013 Market Share of Imports 24%

19. 18 NORTHERN IRELAND MILK SUPPLIES 1993 - 2013 MILK SUPPLIES Millions of litresIndex 19931309100 20021,764135 20031,772135 20041,776136 20051,865142 20061,902145 20071,918146 20081,902145 20091,772135 20101,850141 20111,977150 20121,995151 20132,008153 Up 53% since 1993

20. 19 GROCERY MARKET SHARES 20032004200520062007200820092010201120122013 %%%%%% Tesco23.525.425.9 26 27282726 Dunnes21.022.222.522.124 2523 24 SuperValu19.019.119.620.520 Superquinn8.28.98.27.88877565 Lidl/Aldi5.75.25.55.97101112 14 Centra2.93.22.4 2222444 Spar2.62.51.92.22222444 All Others17.113.514.013.211877443 Total100 Lidl, Aldi & Musgrave Group (Superquinn, Supervalu & Centra) up, Tesco & Dunnes Stores down

21. NATIONAL MILK AGENCY Thank You