Chairman Nicholas Saphir struck a confident note on Brexit, saying the deal with co-op Eko Holland offers a ‘solid foothold in the EU’.
By: Miles Hadfield
Source: Co-operative Press
The Organic Milk Suppliers Cooperative (OMSCo) has forged a continental alliance with another dairy co-op.
The Somerset-based co-op has partnered with Eko Holland, which will give OMSCo a solid foothold in the European Union, according to its chair Nicholas Saphir, and follows a 2015 deal made with US organic dairy co-op Organic Valley.
“The combined volume of organic milk within this alliance will be nearly 400 million litres in Europe, and taking into account our existing US alliance, this increases to a total of 1.4 billion litres globally,” said Mr Saphir.
He added the alliance with Eko Holland will give OMSCo access to a high-quality organic milk supply in Europe. “It’ll broaden our portfolio of products and increase our scale of operations. This will improve our ability to balance efficiently, enhance our flexibility to meet customer needs and provide more milk and processing in Europe,” he said.
OMSCo was formed in 1994 by a group of dairy farmers as a better way to farm, and it now has over 200 farmer members across the UK. It is the only 100% organic farmer-owned and farmer-run dairy co-operative in the UK.
With aspirations for over 30% of OMSCo’s revenue to come from export markets, this new partnership with Eko Holland is seen as critical for the co-op.
“Having nurtured our relationship with Organic Valley, in only three years we’ve been able to generate significant opportunities both ways across the Atlantic, and we’ve not only benefited financially but also through shared expertise. We believe firmly that we will replicate this success with Eko Holland,” added Mr Saphir.
He told the News: “Eko Holland is the fourth largest dedicated organic milk pool in the world and the partnership builds on an already successful trading relationship. OMSCo has been working with Eko-Holland for a number of years now – enabling both co-operatives to balance their organic milk pools.
“Both co-operatives have shared visions and values and typically, being very similar structured organisations, find that they share similar problems and opportunities and therefore can benefit from shared knowledge and expertise. And following the success of OMSCo’s formal partnership with Organic Valley in 2015, it was a natural step to make another formal commitment with an organic milk co-operative in Europe.”
Mr Saphir said Eko Holland and Organic Valley’s co-op model made them ideal partners because: “Co-operation and collaboration is key to future-proofing businesses and trading with organisations that have shared visions and values is a key consideration.”
But he added that while a co-op partner was preferred, “commercial criteria would take precedence: ultimately, will the partnership help OMSCo achieve its long-term objectives and in doing so maintain a stable and sustainable return to members?”
OMSCo has partners outside the co-op sector, he said, announcing a joint venture with Wyke Farms earlier this year and running an exclusive partnership with Yeo Valley through its trading existence.
With 180 farmer members, Eko Holland handles 100 million litres of organic milk and has 13 processor partners.
“A formal commitment with Eko Holland provides OMSCo with a strong foothold in the EU,” said Mr Saphir, who looks forward to OMSCO broadening its product portfolio and increase the scale of its operations.
He told the News that OMSCo was always open to exploring new partnerships in Europe, striking an upbeat note over Brexit.
“Obviously Brexit has brought a certain level of uncertainty, however to date, feedback from OMSCo’s export partners has been incredibly positive,” he said. “British organic dairy products are recognised for their high quality, and OMSCo has focused on added value and specialist product areas where they have leadership. OMSCo remains confident that they will continue to see increased demand from EU and non-EU markets.”
Last month, OMSCo – which has been working intensively to develop export markets since a slump in domestic prices 10 years ago – warned that Brexit posed a risk to UK organic producers looking to export to the US.
It commissioned a study by economist Séan Rickard who warned that the equivalence standards on organic produce between the EU and US would cease to apply to the UK after Brexit. He said a new standard must be signed between the UK and the US before the end of the year.
“A break in the ability of UK organic producers to export to the US would be extremely damaging if not fatal,” he says. “EU and other exports would grow to the detriment of the UK unless there is Government action to move forwards on this equivalence issue.”
But, Mr Saphir told the News: “OMSCo is confident that it will maintain a market in the US post-Brexit, one way or another.
“OMSCo has lobbied intensively over the need to extend the equivalence agreement to the UK and to date has had very positive feedback from the US Embassy, Defra and Liam Fox. OMSCo is committed to growing its global organic dairy exports, which currently represent 20% of sales and generate a premium over OMSCo’s core UK liquid milk business.”
He said the co-op has a long-term strategy that spreads risk across different products and geographical markets, including America, China, Australasia and Europe, by building long-term partnerships with leading in-market players, including Organic Valley.
“This places OMSCo in a strong position to move forwards once the outcome of trade developments are known,” he added. “Ultimately OMSCo is confident that Brexit will open up new opportunities both in the UK and export markets.”