Ornua, owner of the Kerrygold brand, has just had a €50 million monkey lifted off its back.
In a dispute with Brussels over aircraft subsidies, the former Trump administration slapped about $7.5 billion (€6.28bn) worth of tariffs on a range of EU products in 2019, including 25 per cent tariffs on Kerrygold butter, Ornua's flagship brand.
This is estimated to have cost Ornua about €50 million last year and led to a significant price hike in Kerrygold butter in the US where it is the second-biggest selling butter brand.
Earlier this month, however, the EU and the US agreed to suspend these tariffs for at least four months in the hope that a resolution on the airline subsidy debacle can be reached.
"We welcome the four-month suspension by the EU and US of punitive tariffs on Irish dairy products into the US," Ornua chief executive John Jordan said, noting the company was responsible for 90 per cent of butter exported from the EU into the US.
“These punitive tariffs represented an unwelcome and unnecessary barrier to doing business,” he said.
“While this four-month suspension is a positive development in this long-standing dispute, the imperative for a permanent resolution remains so that Irish companies, like Ornua, can invest for future growth in the US,” he added.
Kerrygold is pitched as a high-end dairy product in the US, with marketing campaigns playing up its grass-fed, all-natural, hormone-free roots.
The butter label, with its signature gold wrapping, is now the number two butter brand there, selling roughly three million packets a week.
Despite the price hike, Kerrygold sales in the US increased last year primarily because of the lockdown and increased supermarket sales.
Prior to the tariffs, however, Kerrygold had enjoyed 10 consecutive years of double-digit growth in the US.
In 2019, Kerrygold became the first Irish food brand to exceed €1 billion in annual sales, helped by its growing popularity in the US. Ornua is due to release its annual results for last year next month.