Glanbia, the country's largest milk processor, yesterday reversed its decision to replace its pint cartons of milk with half-litre packs containing 13 per cent less milk for which it planned to charge the same price.
The reversal of the decision came following direct contact between the Minister of State for Consumer Affairs, Mr Kitt, and the company on Tuesday. He had issued a statement highly critical of the move.
When the company's decision became public, there was an outcry but the company continued to defend its decision on the basis that changing to the smaller metric pack had increased costs.
But yesterday morning Glanbia issued a statement saying it had decided to retain the existing one pint milk carton "in response to public demand for continued availability of the traditional one pint carton at the current market price".
"The planned introduction of the new half-litre carton has regrettably been linked to the euro changeover. In reality, this issue has nothing to do with the euro but was unfortunately interpreted as such," said Glanbia managing director Mr John Moloney.
"We are fully committed to an orderly euro changeover process for all products, with full clarity for consumers," the statement continued.
"Recognising public demand, we have decided at this time to continue to make available the one pint carton. We reiterate that our one-litre and two-litre products, which account for almost 90 per cent of our fresh milk production, had never been affected by this issue," it continued.
"Glanbia apologises to its customers and consumers for any confusion on this matter," it concluded.
In his statement, Mr Kitt said he welcomed the decision to cancel plans to replace the one pint carton and said the decision would mean there would not now be any increase in milk prices and the real winner would be the consumer.
He said he also welcomed the company's decision to honour its commitment in relation to the introduction of the euro.
Mr Pat Rabbitte TD, the Labour Party spokesman on enterprise, trade and employment, said the case emphasised the need for the introduction of a temporary price freeze to cover the period running up to the introduction of the euro.
"On this occasion, media coverage and political and public criticism forced the company to do a dramatic u-turn.
"But there will be other increases that will not receive the same media attention and there will be other producers and retailers, less amenable to public opinion, who will not back down," he said.
The president of the Irish Creamery Milk Suppliers' Association, Mr Pat O'Rourke, who had come out in support of the company increasing the price of milk on Tuesday, said last night his position had not changed.
"The facts are the same as yesterday. The cost of processing milk has increased but the price being paid by consumers has remained virtually unchanged since January 2000," he said.
"The cost of these increases should be passed on to the consumer and not carried by the producer anymore."