Consolidation of co-ops on island 'inevitable' - Lakeland Dairies CEO
There needs to be a "different approach from a regulation perspective" in relation to the potential mergers of co-ops on the island, according to the CEO of Lakeland Dairies.
Colin Kelly told Agriland that Ireland is likely to follow a trend that has seen the merger of some key players in the dairy sector in Europe.
He believes it is "inevitable" that this trend will also play out in Ireland, but in his opinion the current regulatory structure is not in the right place yet to support mergers of a significant size.
"We've got less co-operatives on the island than we had 10 years ago.
"If there's to be consolidation, that means that some bigger co-operatives are going to merge with each other and the way things are at the moment some of those will probably be prohibited from a competition perspective.
"I think as an industry we need to talk to the regulators - give them a sense of where things are at, give them a sense of things that probably need to happen over the next four to five years, but also very much point to the things that are happening in mainland Europe," Kelly added.
Lakeland Dairies
Lakeland Dairies this week reported an increase in turnover to €1.93 billion for 2025 up from €1.75 billion in 2024.
The 10% jump in revenue growth was chiefly driven by higher milk volumes, from the co-op's 3,000 farm families, which grew to a record 2.14 billion litres last year.
The increase in volumes was thanks to the "economics of producing milk" last year and also a good spring in 2025.
This 5.7% increase in milk volumes in turn delivered a 19% jump in pre-tax profits for Lakeland Dairies which grew to €25.2 million in 2025 - up from €21.3 million a year earlier.
According to the co-op's CEO, Lakeland Dairies believes there is "always opportunity" to increase its milk pool.
Kelly said: "Ultimately that will be down to our farmers, and if we look at where we've come since 2015, we've had a lot of new entrants, and a lot of those were people who were converting across from beef.
"Over the last 12 months beef has provided a very sustainable income, so we haven't seen as much activity in that.
"It'll ultimately come down to economics - we know that the cost of entry and the cost of expansion is very significant now from both a regulatory and a financial perspective.
"So we wouldn't be in envisaging that we will get the similar types of growth to what we've gotten over the last 10 years, but we do expect more people to come in and the interesting piece will be on how beef returns hold up versus maybe dairy returns over the next three to five years."
2026
The CEO of Lakeland Dairies is acutely aware that future looking plans and ambitions now come with a caveat while the Middle East conflict continues.
Kelly told Agriland that "farmers are certainly going to be under a lot of pressure in 2026".
"If we look at the way farm inputs have increased - the three big ones being feed, fertiliser and fuel and then look at it from a processor perspective, demand is under pressure and the input costs are increasing.
"Ultimately, our shareholders own the business so they are feeling the cost at farm level, they're feeling the cost at processor level.
"We'll certainly be doing everything in power to support our farmers with an eye to the fact that we've been around for 130 years because our farmers have supported the co-op and we've supported our farmers".
