The timing of the Glanbia-Ornua dairy row has magnified its impact

The timing of Glanbia's recent decision to launch a new dairy brand, Truly Grass Fed, in the United States has contributed hugely to the row that has broken out with Ornua, which owns Kerrygold.

It truly must be a massive coincidence that Glanbia has launched a brand echoing Kerrygold's US marketing claims that its cows are grass-fed, especially given the fact Kerrygold is currently embroiled in a US lawsuit over whether those marketing claims stand up to scrutiny.

If Glanbia, which owns 25 per cent of Ornua, emphasises that its cows are truly grass fed, does that then imply that it considers the grass-fed cow claims of other brands to be something other than true?

Kerrygold has ascended all the way to the number two spot in the lucrative US market on its “grass fed” marketing message. Milk from grass-fed cows makes better butter. It tastes good and it gives it an attractive yellow colour. US cows are largely fed on grain, not grass. As a consequence, the butter is paler. Kerrygold stands out in the US.

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Lawsuit

Yet, its marketing claims have also made it a target. A San Diego resident has launched a class action consumer lawsuit against Ornua alleging that Irish cows cannot be exclusively grass fed, as they spend most of the winter locked up in sheds eating imported fodder.

Ornua is defending the case and seeks to have it thrown out. Given the timing, it could really have done without its biggest shareholder launching a competing US-Irish dairy brand based on grass-fed claims.

If Glanbia didn’t already know it was sticking its fingers into an open wound at Ornua, it probably should have.

The standoff between Glanbia and Ornua over the issue has already resulted in the cancellation of an Ornua board meeting, which would have been attended by the Glanbia’s two Ornua board nominees.

But standoffs cannot last forever. The row will have to be resolved sometime. Either Glanbia will roll back on its strategy or, more likely, Ornua will have to find a way to accept that its biggest shareholder is now a US competitor.