Connacht Gold says price increases will be necessary to ensure milk supplies

The Connacht Gold Co-op has indicated prices may have to increase because farmers are being paid too little.

The company, which proposes to change its name to Aurivo, has reported a record turnover of €407m in 2012, an increase of 18%.

This is being mainly attributed to the acquisition of the milk and retail stores businesses from Donegal Creameries.

The results which were published at the end of last week say the integration of nine retail stores in Donegal and two in Tyrone led to an increase of 29% in agribusiness sales, to €114m.

The 120 million litre milk pool acquired from Donegal Creameries contributed to a significant increase in sales of consumer foods and dairy ingredients.

The company says sales rose by 52% to almost €70m in 2012 in what was a very difficult marketplace. In spite of continuing poor consumer confidence, Connacht Gold and Donegal milk brands are performing strongly in terms of holding market share.

However, the company says price increases are required in order to sustain the supply chain as the returns to processors and farmers for liquid milk are inadequate at present.