4 Chairman's Statement 5 CEO Statement 2008 in Review by NeilYounger


									The National Dairy Council
28 Westland Square, Dublin 2. Ireland

Tel: +353 1 6169726
Fax: +353 1 6169760

Dairy: Food for Life
Annual Report 2008
                                          The National Dairy Council

 4   Chairman’s Statement
 5   CEO Statement: 2008 in Review
 9   Reports & Financial Statements
21   NDC Board
22   Marketing & Communications Sub-Committee
22   School Milk & Dairy Sub-Committee
23   Accountability & Corporate Governance Sub-Committee
23   Issues Management & Nutrition Sub-Committee
24   Organisational Structure & Staff

                                                 Annual Report 2008
The National Dairy Council

Chairman’s Statement
UnDoUbteDLy, 2008 wiLL long be remembered as an                       Developments such as the School Milk & Dairy Programme;
exceptionally difficult year on all fronts of our economy. For        progress in marketing and consumer research; and the
dairy farmers, it was marked by a dramatic and sustained              strengthening of our scientific and nutrition knowledge base,
decline in milk prices as processors were exposed to the triple       have all demonstrated the purposefulness of the NDC and its
challenges of the reduction in global demand, a contracting           ability to impact at national level. Built into the architecture of
national economy and highly price-sensitive consumers. This           Dairy: Food for Life is a commitment not just to progress, but to
rapid deterioration in prospects was especially disheartening         measurement by credible means.
given the Irish dairy industry had, only a year before, enjoyed
real price rises for the first time in many years, and the            Over the course of 2008, the NDC has demonstrated itself to
burgeoning sense of confidence that came with this. The decline       be a high performance organisation and has made significant
in milk prices has caused real hardship on farms, particularly        advances towards becoming a world-class dairy advocacy
given the recent substantial investment under the Farm Waste          agency, one that will deliver value to its stakeholders over
Management Scheme.                                                    the course of this five-year plan. The current economic crisis
                                                                      is unlikely to have any short-term resolution but, even in
The global financial crisis has undermined many certainties and       these difficult times, it is more important than ever to stress
Ireland’s economic priorities have been reshaped in a short space     that market research, promotion and issues management are
of time. But, even in this most challenging of environments,          not ‘extras’ to our industry but fundamental to its evolution.
we must not lose sight of the fact that milk and dairy are            Commitment to strategic thinking can only reinforce the
central to Irish life and that Ireland, as home to an efficient and   prospects of recovery once the current market difficulties
environmentally-friendly milk production system, has a long-          ‘bottom out’ and the NDC will play a central role in negotiating
term and sustainable future as a major international supplier.        the challenges ahead.
Similarly, the immediate challenges of price sensitivity and
market confidence should not deflect us from addressing               I would like to take this opportunity to express my sincere
the diverse range of issues which impact on the relationship          thanks to all our dairy farmers and member co-ops for their
between consumers and dairy, and which the NDC, as the Irish          unreserved support during 2008 and pay tribute to our board
dairy industry’s advocacy and promotional body, is uniquely           members, new sub-committee members and many stakeholders
positioned to address. The pork recall in late 2008 reminded us       for their hard work and dedication.
of the far-reaching consequences that a seemingly localised event
can have, and underscored the need for a comprehensive issues         Finally, I would like to acknowledge the work of CEO Helen
management strategy for the dairy sector. With the launch, in         Brophy and her staff, who contribute on a daily basis, with
April 2008, of Dairy: Food For Life – A Strategy to Promote Irish     unfailing enthusiasm and hard work, to the progress and
Milk & Dairy Products 2008-2012, the NDC has signalled not            development of our industry.
only its intention to play a decisive, proactive and positive role
in the interface between consumer and the industry, but also
set out a sustained and robust roadmap by which it will achieve
these goals.

The speed and professionalism with which this strategy was
implemented over the course of 2008 can leave no observer
in any doubt that the NDC is an organisation with the vision          Dominic Cronin
and determination to play a long-term role in strengthening           Chairman
the position, visibility and relevance of Irish milk and dairy        NDC
products to the consumer.

Annual Report 2008
                                                                                                             The National Dairy Council

CEO Statement: 2008 in Review
the nDC enteReD 2008 in a mode of restructuring                           Innovative
and renewal. This process, instigated with a change of CEO            The NDC strives to be innovative, bringing new ideas and a
in September 2007, would rapidly gain momentum in the                 fresh approach to the work undertaken.
following six months. Through a commitment to frank and
open dialogue, the NDC sought to assess the many serious                  Forward-looking
structural deficits identified by its broad community of              The NDC endeavours to be forward-looking, pre-empting
stakeholders, among them dairy processors, farmers, health            issues and matters of interest and importance to its funders and
practitioners and Government departments, as it sought to gain        the milk and dairy sector.
the clearest possible picture of the core issues and challenges
facing the Irish dairy industry. Recognising that there was also          Authoritative
much to be learned from peer organisations, the NDC studied           The NDC ensures that the views and opinions of the
the work of comparable dairy organisations internationally, a         organisation are rooted in robust scientific research so that it can
process that served to bring it up to speed in the global trends in   speak with authority.
milk production and consumption.
There were many strands to this process and many contributors             Accessible
to be thanked. Ultimately, the work would be seen to feed a           The NDC strives to engage openly with the many stakeholder
common purpose, one that took expression in Dairy: Food for           groups and to be accessible and responsive.
Life – A Strategy to Promote Irish Milk & Dairy Products 2008-
2012. Launched in April by then Minister for Health Promotion,        The strategy of Dairy: Food for Life could now unfold in a
Mary Wallace TD, and endorsed by the Department of                    meaningful context. The resources of the NDC, channelled
Agriculture, Fisheries & Food, Dairy: Food for Life marked the        through distinct but interconnecting programmes, would be
beginning of a new direction for the NDC and signified nothing        seen to progress in ways that made sense for the organisation:
less than its complete strategic reorientation, one that would        forward-thinking, strategic, innovative, transparent and
commit it to delivering services of real value and relevance          measurable in their results.
to those it sought to serve: the Irish consumer, the Irish dairy      The implementation of the various programmes outlined by
industry and our partners in the broader community.                   Dairy: Food for Life could also be seen as meaningful expressions
                                                                      of a single purpose: to play a dynamic role in the space between
Core Values                                                           industry and consumers, and to earn the trust and respect of
Without a sense of purpose, there can be no meaningful action;        consumers, dairy farmers and industry.
without values, it is difficult to generate purpose. Before setting
out our plan of action for the future, Dairy: Food for Life           Challenges
reflected on the question of identity or, put simply, what the        Ireland’s position as both a major dairy producer and consumer
organisation stood for. This is never a straightforward question      is well established, and the country leads the EU in per capita
but it proved a worthwhile exercise in self reflection. Through       consumption of milk. However, as research undertaken in
it, the core values of the NDC were identified, values that it        2008 confirmed, this position masks often serious misgivings
would set out to convey in its actions and embed in its culture       and misunderstandings about milk and dairy among Irish
and its ways of working. These values bear repeating in advance       consumers. Strong competition from overseas suppliers and
of any review of our activities:                                      innovations in other food and beverage categories have often
                                                                      capitalised on lifestyle trends at the expense of Irish milk and
    Trusted                                                           dairy consumption.
The NDC is building trust with key stakeholder groups                 While Irish processors have made important contributions to
through the provision of well-informed and balanced views             value-added products and NPD (new product development),
and information.                                                      key Irish outputs such as butter and cheese are seen to belong

                                                                                                                     Annual Report 2008
The National Dairy Council

to mature categories, and have not benefited from the kind                to support dairy consumption from toddlers right through to
of marketing activity that has transformed the perception of              the young adult years, were launched;
categories such as yogurts and spreads. Over 2008, the global        •	   The NDC developed closer links with relevant Government
economic crisis impacted heavily on Ireland, and the speed                departments and authorities throughout 2008, and involved a
and depth of the downturn astonished many onlookers. The                  number of Ministers in various high profile events including
consequences for the dairy industry were dramatic. Branded                An Tánaiste, Mary Coughlan, TD and Minister for
Irish milk has traditionally enjoyed almost complete market               Education, Batt O’Keeffe, TD;
dominance domestically. However, 2008 brought significant            •	   The NDC became a participant in international committees
pressure to this position as consumers became increasingly                such as the European Dairy Marketing Forum and the
price sensitive, and private label and discount suppliers taking a        International Milk Promotion Group. The European Dairy
growing share of the market.                                              Marketing Forum was held in Dublin in 2008, and the first
In the broader dairy category, price sensitivity was also one of          steps were taken to develop a new Ireland-GB dairy alliance,
the major trends. While consumers had embraced a range of                 a partnership between the NDC and the GB Dairy Council;
innovative and value-added products in previous years, the end       •	   The NDC maintained a presence at relevant conferences and
of 2008 saw retrenchment towards the ‘essentials’.                        seminars such as the Irish Osteoporosis Society AGM and
                                                                          annual conference; an all-Ireland multi-sectoral conference
Strategic Programmes                                                      on obesity; a Teagasc relay workshop looking at the National
Dairy: Food for Life set out the road map by which the NDC                Teens Food Survey; and the Irish section annual meeting of
could play its role in meeting these challenges and promote Irish         the Nutrition Society. On an international basis, the NDC
milk and dairy products to Irish consumers as a 21st century              was also represented at the Dairy Council for Northern
organisation.                                                             Ireland annual conference, the Global Dairy Congress and
It set out six core programmes in which all activity would be             meetings of the Utrecht Group;
directed over its five-year lifespan. These are:                     •	   The NDC participated in health promotion fairs such as
•	 Advocacy & Communications;                                             the Dublin City University Health Promotion Fair and the
•	 Marketing & Promotions;                                                Dublin Institute of Technology Staff Day;
•	 School Milk & Dairy;                                              •	   As part of its reinvigorated PR strategy, the NDC received
•	 Issues Management;                                                     strong press coverage on key health concerns across the
•	 Nutrition; and,                                                        general media;
•	 Accountability & Corporate Governance.                            •	   NDC nutritional advice and information appeared in
                                                                          monthly columns in the Irish Farmers Journal and the Irish
Embedded in the strategy, and in keeping with our values as a             Farmers Monthly. Relationships with the agri-press will
trusted and authoritative organisation, is the belief that actions        continue to grow in 2009 as the NDC shares information
must be measurable in their impact. The six programmes                    on its programmes and activities with both industry and the
incorporate a substantial feedback and monitoring element,                rural community;
meaning it will be possible to talk with confidence about their      •	   The NDC introduced consumers to a highly successful
progress over the five-year period and, ultimately, give real             Health & Wellbeing Evening. The first of these, held in
substance and credibility to the claims made by the NDC.                  Sligo, attracted over 450 people. Hugely positive feedback
                                                                          has ensured it will be rolled out nationally to four locations in
Advocacy & Communications                                                 2009;
In the review phase that preceded the launch of Dairy: Food          •	   In September, the NDC returned to the National Ploughing
for Life, the NDC’s communications strategy was recognised                Championships after many years, this time in partnership
as demonstrating a number of serious deficits and part of                 with the FAI. A very successful three-day penalty shoot-out
the disconnect that had emerged between the NDC and its                   competition involved over 12,000 children and brought more
stakeholders.                                                             than 20,000 visitors to the marquee;
Dairy: Food for Life set out an Advocacy & Communications            •	   The NDC website was also completely re-designed, with
Programme that would reposition the NDC as a trusted and                  an emphasis not just on creating a positive, user-friendly
respected information source, one which could confront the                experience for consumers, but also evolving as a portal for a
pervasive anti-dairy agenda that had gained influence, in spite of        range of IT services in 2009, including an e-library facility
a lack of scientific credibility, in many influential quarters.           for health professionals; and,
Over the course of 2008, significant progress was made in laying     •	   The NDC also embraced, as part of its new communications
the foundations for a communications programme worthy of the              drive, the need to be proactive in engaging with stakeholders
industry and some key achievements are set out here:                      and making the activities of the NDC visible.
•	 Formal links were developed with organisations such
    as the Irish Osteoporosis Society and the Dental Health          Marketing & Promotion
    Foundation, who made contributions to a range of well-           The NDC’s marketing and promotional activity, while
    received information guides, including ‘Making Sense             consistently well-funded, was identified in the review process
    of Food Allergies and Intolerances’ and the ‘Guide               of late 2007/early 2008 as being an area in fundamental need of
    to Osteoporosis’. These were distributed through the             review and realignment. The Dairy: Food for Life strategy put
    appropriate healthcare channels including GP surgeries,          particular emphasis on purposeful and effective marketing and
    healthcare centres and hospitals, and were also made freely      promotion activity, and recognised the programme needed, first
    available on the NDC website;                                    and foremost, to be informed by and aligned to the Advocacy &
•	 A range of new and revised consumer-specific information          Communications Programme.
    guides, including the NDC Dairy Den Programme, designed          Soon after the launch of Dairy: Food for Life, the NDC returned

Annual Report 2008
                                                                                                           The National Dairy Council

to public prominence with a fresh, updated image and a               while significant issues were identified, it came out strongly
message relevant to the targeted demographics. The ‘Nothing’s        in favour of its revitalisation under a new, more inclusive
as Natural as Milk’ execution was the centrepiece of a 15-week       heading: the School Milk & Dairy Programme. Not only have a
multi-media campaign that saw the NDC secure considerable            number of serious nutrition issues among Irish school children
media coverage in the national and regional press, and national      served to underline its continuing value, the programme
and local radio. The overall campaign commenced with the             itself was identified as offering a vital line of communication
unveiling of the new identity for the NDC, and was supported         between the dairy industry and its consumers of the future.
by the 13 brands of liquid milk sold within the domestic market.     The review process highlighted promotion, administrative and
This proactive promotion of the brands of its members was a          storage issues that needed to be addressed, but also found that,
first for the NDC.                                                   while the image of the school milk scheme was poor among
Key messages disseminated during the campaign included:              students, there was widespread support among parents for its
the recommended intake of three dairy servings per day; the          continuation. The price point (x30 per annum) was perceived
calcium deficiencies in Irish teenage girls; the importance of       as excellent value for money, particularly in the current difficult
dairy for children; and the benefits of milk in sports nutrition.    economic circumstances.
The advertising element of the campaign was highly targeted.         Revitalising a programme that had been seriously neglected
In regional media and men’s magazines, the focus was on the          required careful planning, not least because the NDC was
endorsements of high-profile GAA players, which was further          conscious that its new messaging needed to engage with the
supported through public appearances. In women’s magazines,          target student audience as sophisticated consumers rather than,
the message was around infant health. Arguably, the most             as they had previously been regarded, passive recipients. The
memorable and successful aspect of the campaign was the ‘Pink        recruitment of a dedicated School Programme Manager was an
Lady’ visual execution, which had 18-34-year-old urban, female       important indication of strategy in this regard.
consumers as its focus. This key demographic previously had          With the pilot programme initiated successfully in 75 schools,
little knowledge of the NDC, and is both highly sensitive to the     resulting in a 5 per cent increase in student participation, the
healthy-living message, and also a group considerably influenced     learnings from it have fed directly into the national programme
by the anti-dairy lobby. Follow-up market research undertaken        that is green-lighted to roll out in 2009/10.
by TNS MRBI, involving over 500 interviews among a                   The new energy around the programme has also allowed
nationally representative sample of adults, found the ‘Pink          the NDC to play a more direct role in contributing to health
Lady’ campaign had very positive responses, with a higher-           and nutrition information in schools. Partnership with the
than-average recall among 18-to-34-year-olds and strong appeal       Football Association of Ireland (FAI) was instigated in 2008
across other demographics.                                           and has provided an important stepping stone to building a
                                                                     much stronger link between milk and sport in the minds of
Dairy: Food for Life highlighted the need for a more                 schoolchildren. A pilot scheme, launched in 2008, involved the
sophisticated understanding of the Irish dairy consumer. As          FAI’s club promotions officers promoting the link between milk
the NDC overhauled its market intelligence services in 2008,         and sport in five club areas, and doing so in close co-operation
it recognised the opportunity for a major contribution in this       with the NDC and local dairies. The linkage also allowed the
area. Working in partnership with TNS Worldpanel, the                NDC to achieve significant media profile for the School Milk
NDC developed a new segmentation model of the Irish dairy            & Dairy Programme, with endorsements from Ray Houghton,
consumer that segmented it into five key ‘behaviour’ clusters.       Packie Bonner and Giovanni Trapattoni.
Information drawn from 3,000 Irish households and fused with
actual purchasing data allowed for this new model of the Irish       Issues Management & Nutrition
liquid milk and dairy consumer’s usage and attitudes. This           The need to take a robust and proactive approach to issues
ongoing market research programme not only allows the NDC            management and nutrition was recognised as a strategic priority
to better measure the success of its own marketing activities, but   at the very beginning of the review process. On an ongoing basis,
affords the opportunity for member co-ops to better understand       the NDC needs to be in a position to confront assertively anti-
and track the behaviour and attitudes of their consumers.            dairy campaigners, while the management of food safety issues
The NDC will continue to develop the cluster model in 2009,          required a thoroughgoing, coherent and informed strategy.
and build strategic targets for each of the five segments it has     The impact of the Irish pork recall in late 2008 brought into
identified. Information from this will also feed back into its       sharp focus the devastating repercussions of even the slightest
evolving Issues Management Manual (see Issues Management &           insecurity in our food safety systems, and served to underline the
Nutrition).                                                          timeliness of the actions taken by the NDC over 2008.
                                                                     With the implementation of the Issues Management and
School Milk & Dairy                                                  Nutrition Programme, an expert Board Sub-Committee
Unlike many other European countries, Ireland has never had          was established. Drawing on the expertise of members with
a national school-lunch programme. Launched by the NDC in            medical, nutritional, marketing and media backgrounds, it
1982, and reaching over 250,000 students at its peak, the School     laid, over a short period of time, a very solid foundation for a
Milk Scheme stepped partially into the breach, providing a           systematic and comprehensive issues mapping process. This
regular source of calcium and nutrition to Irish students, and       was further supported by the creation of the template for an
was particularly favoured, for this reason, in the primary           Issues Management Manual, the development of which will be a
school system.                                                       priority in 2009.
For a variety of reasons, this programme had largely lost            The NDC’s Nutrition Programme was equally energised by
momentum over the last decade, to the point where its future         an active and expert Board Sub-Committee which guided the
viability was in question. The review process involved a full        NDC’s aim of becoming a national centre of knowledge on dairy
root and branch investigation of the School Milk Scheme and,         and nutrition. Going forward, the NDC’s expertise in this area

                                                                                                                   Annual Report 2008
The National Dairy Council

will feed naturally into its marketing and promotion activity,       Dairy: Food for Life strategy.
and strengthen relationships in the health professional area.        Accountability is also about managing resources and, while it is
While more and more studies confirm the health benefits of           a small organisation, the NDC has proved its ability over 2008 to
milk and dairy, this objective and scientific information is often   perform at a national level.
obscured and marginalised, sometimes for simple want of              In 2008, a number of positive developments included the return
advocates to highlight it.                                           of Connacht Gold and the joining of Town of Monaghan as
The Nutrition Programme has a critical role in correcting this       contributors for the first time. Confidence in the NDC’s new
imbalance and in making information available as and when            strategy was further highlighted by the Irish Dairy Board’s
needed by health professionals. Work on an electronic nutrition      decision to increase its funding by 50 per cent for 2008 and 2009.
library began in 2008 and, when completed in 2009, will offer
a comprehensive on-line reference database incorporating             Reflections and Achievements
research studies, media clippings and information material           Last year was a highly significant year for the NDC, as it
specifically focused on dairy nutrition.                             reasserted itself as a strong and positive voice for the Irish dairy
Alongside the strategic development process, the NDC                 industry. It was also, of course, a year of dramatic change for the
also dealt with a range of individual nutrition and issues           Irish economy, the repercussions of which are still being felt. To
management concerns that emerged during 2008. These                  be viable, any strategy document must have an inbuilt review
included:                                                            component, reflecting and adapting to changed circumstances
• The advertising campaign by the World Heart Federation             as it progresses. There can hardly be a better example of such
    drawing links between the dangers associated with saturated      change than the economic challenges that beset our economy
    fats and heart disease which used destructive images of          in late 2008. Dairy: Food for Life has adapted its priorities
    cheese and butter to illustrate their claims;                    accordingly. Given the fact that the take-home market is likely
•		 The application by the European Natural Soyfood                  to grow in 2009 as a result of less out-of-home consumption and
    Manufacturer’s Association to gain legal recognition of the      the ongoing pressures from competitors, the NDC will examine
    term soya ‘milk’, which was subsequently rejected by the EU;     how it can be proactive in the marketing of milk and dairy
• The new Broadcasting Bill published in May 2008, which             products for the specific benefit of its members.
    sought to restrict the advertising of foodstuffs that contain    However, changes have not simply been economic. The issues of
    fat, transfatty acids, salts or sugars to children and which     environmental sustainability as both a consumer and trade issue
    could have serious implications for the dairy sector; and,       rose notably in prominence over the course of 2008, and will be
• Responding to a large number of false and misleading claims        monitored closely as the five-year strategy moves forward.
    regarding milk and dairy products which received either          These new challenges underline the need for a strong,
    press or radio coverage. Examples included: high levels of       authoritative and strategy-driven advocacy organisation. The
    hormones and antibiotics present in milk; milk from cows         NDC is determined to play its role in safeguarding the long-
    not being suitable for human consumption; links to cancer;       term development of the Irish milk and dairy industry, and
    and higher levels of calcium in green vegetables than milk.      communicating the message to Irish consumers that they are
                                                                     abundantly supplied with one of nature’s most nutritious and
The NDC plays a vital role in dealing with ongoing issues that       versatile foods. A more complete review of the work completed
arise in the media or from particular sources (e.g. alternative      in 2008 was published in early 2009 in our Annual Review 2008
practitioners) and was proactive throughout 2008 in providing        & 2009 Plan, which can be downloaded on www.ndc.ie
balanced, evidence-based facts to debunk these claims.               I would like, firstly, to sincerely thank all those in the industry
Equally, the need for strong representation at political level       who helped and supported the NDC over the year, in particular,
was recognised as vital on issues that could potentially harm        Chairman Dominic Cronin, the members of the Board and
the future development of the sector, as in the quest for ‘milk’     Sub-Committees, the NDC staff and, of course, our co-operative
designation for soy products.                                        supporters, who collectively provide the NDC with the range
                                                                     of resources that allowed it to perform at a high level in 2008. I
Accountability & Corporate Governance                                look forward to sustaining this level of progress in 2009.
The NDC’s total budget spend for 2008 reached just under
x2.8m and is funded directly through a levy system, with
the average dairy farmer contributing approximately x160
per annum. The need for transparency, accountability and
professionalism is, accordingly, self-evident and part of the
NDC’s commitment to ensuring value for money for every euro
of funding it receives.
In early 2008, the redundancy and restructuring programme was
completed, reducing staff numbers in the organisation to three,
in addition to the CEO. This was followed by a restructuring of
roles and the recruitment of a new School Programme Manager.
As part of this programme, the finance function was outsourced,
IT systems modernised and a new external auditor, Deloitte,
appointed. The NDC also became a member of IBEC for the
first time. Governance structures were improved by increasing
board meetings from a quarterly to a bi-monthly basis, and
establishing four new expert board sub-committees tasked with        Helen Brophy
overseeing and monitoring the progress of key aspects of the         CEO

Annual Report 2008
                                                                             The National Dairy Council

     (being a company limited by guarantee and not having a share capital)

            FOR THE YEAR ENDED 31 DECEMBER, 2008

                                                                                    Annual Report 2008
The National Dairy Council


                   Directors’ Report
                   The directors present their Report and the Financial Statements for the year ended 31 December, 2008.

                   PRINCIPAL ACTIVITIES
                   The principal activity of the National Dairy Council (NDC) is to support Irish dairy farmers by driving the
                   positive position and consumption of milk and dairy products through integrated marketing and communications
                   programmes, based on informed scientific evidence.

                   The results for the year and the state of affairs of the company are set out on pages 13 and 15 respectively.

                   The NDC has a vital role in supporting the Irish dairy sector in driving the consumption and positioning of milk
                   and dairy. The NDC’s vision is to be the authoritative and trusted voice in advancing the consumer perception
                   and consumption of Irish milk and dairy products.

                   The current directors of the company are:

                     Mr. D. Cronin (Chairman)                                     Mrs. M. Purcell
                     Mr. H. Corbally (Vice Chairman)                              Mr. C. Ryan
                     Mr. E. Bray                                                  Mr. S. McAuliffe (appointed 12 March 2008)
                     Mr. J. Cahill                                                Mr. F. Tobin (appointed 29 January 2009)
                     Mr. T. Corcoran                                              Mr. J. Hehir (appointed 19 March 2009)
                     Mr. S. Griffin
                     Mr. P. Kelly
                     Mr. R. Kennedy                                               Mr. J. Collum resigned 29 January 2009
                     Mr. K. Kiersey                                               Mr. G. Quain resigned 18 March 2009

                   BOOKS OF ACCOUNT
                   The measures taken by the directors to secure compliance with the company’s obligation to keep proper books of
                   account are the use of appropriate systems and procedures and employment of competent persons.
                   The books of account are kept at 28 Westland Square, Dublin 2.

                   There have been no significant events affecting the company since the year end.

                   The directors are responsible for the maintenance and integrity of the website. Legislation in the Republic of
                   Ireland concerning the preparation and dissemination of financial statements may differ from legislation in other

                   The auditors, Deloitte & Touche, Chartered Accountants, were appointed during the year and continue in office
                   in accordance with Section 160(2) of the Companies Act 1963.

                   Signed on behalf of the Board:

                   Date: 20 May, 2009

Annual Report 2008
                                                                                                             The National Dairy Council

The National Dairy Council
Statement of Directors’ Responsibilities
Irish company law requires the directors to prepare financial statements for each financial year which give a true
and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In
preparing those financial statements, the directors are required to:

•	 select	suitable	accounting	policies	and	then	apply	them	consistently;
•	 make	judgements	and	estimates	that	are	reasonable	and	prudent;
•	 prepare	the	financial	statements	on	the	going	concern	basis	unless	it	is	inappropriate	to	presume	that	the	
   company will continue in business.

The directors are responsible for keeping proper books of account, which disclose with reasonable accuracy, at
any time, the financial position of the company and to enable them to ensure that the financial statements are
prepared in accordance with accounting standards generally accepted in Ireland and comply with Irish Statute
comprising the Companies Acts, 1963 to 2006. They are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Independent Auditors’ Report to the
Members of The National Dairy Council
We have audited the financial statements of The National Dairy Council for the year ended 31 December, 2008,
which comprise the Income and Expenditure Account, the Statement of Total Recognised Gains and Losses,
the Balance Sheet, the Cashflow Statement and the related Notes 1 to 16. These financial statements have been
prepared under the accounting policies set out therein.

This report is made solely to the company’s members, as a body, in accordance with Section 193 of the Companies
Act, 1990. Our audit work has been undertaken so that we might state to the company’s members those matters
we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the company and the company’s members
as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors
The directors are responsible for preparing the financial statements, as set out in the Statement of Directors’
Responsibilities, in accordance with applicable law and accounting standards issued by the Accounting Standards
Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting
Practice in Ireland).

Our responsibility, as independent auditors, is to audit the financial statements in accordance with relevant legal
and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with
Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute
comprising the Companies Acts, 1963 to 2006. We also report to you whether in our opinion: proper books of
account have been kept by the company; whether, at the Balance Sheet date, there exists a financial situation
requiring the convening of an extraordinary general meeting of the company; and whether the information
given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have
obtained all information and explanations necessary for the purpose of our audit and whether the company’s
Balance Sheet and profit and loss account are in agreement with the books of account.

We also report to you if, in our opinion, any information specified by law regarding directors’ remuneration and
directors’ transactions is not disclosed and, where practicable, include such information in our report.

We read the Directors’ Report and consider the implications for our report if we become aware of any apparent
misstatement within it. Our responsibilities do not extend to other information.

                                                                                                                      Annual Report 2008
The National Dairy Council

                   Basis of audit opinion
                   We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
                   Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and
                   disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements
                   made by the directors in the preparation of the financial statements and of whether the accounting policies are
                   appropriate to the company’s circumstances, consistently applied and adequately disclosed.

                   We planned and performed our audit so as to obtain all the information and explanations which we considered
                   necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements
                   are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our
                   opinion, we evaluated the overall adequacy of the presentation of information in the financial statements.

                   In our opinion, the financial statements: give a true and fair view, in accordance with Generally Accepted
                   Accounting Practice in Ireland, of the state of the affairs of the company as at 31 December, 2008 and of the deficit
                   for the year then ended; and have been properly prepared in accordance with the Companies Acts, 1963 to 2006.

                   We have obtained all the information and explanations we considered necessary for the purpose of our audit. In
                   our opinion, proper books of account have been kept by the company. The company’s Balance Sheet and its profit
                   and loss account are in agreement with the books of account.
                   In our opinion, the information given in the Directors’ Report is consistent with the financial statements.

                   Deloitte & Touche
                   Chartered Accountants and Registered Auditors

                   Date: 20 May, 2009

Annual Report 2008
                                                                                                   The National Dairy Council

                                The National Dairy Council
                         Income and expenditure account
                       For the year ended 31 December, 2008

                                                                                                As restated
                                                                                         2008          2007
                                                                                            €             €


Income                                                                             2,418,120      2,318,912

Direct expenses                                                                    2,284,136      2,221,960
Establishment expenses                                                               151,150        147,059
Administrative expenses                                                              329,933        144,584

Total expenses                                                                     2,765,219      2,513,603

Deficit on ordinary activities before taxation                    2                (347,099)      (194,691)

Taxation                                                          4                 (40,297)       (37,334)

Deficit on ordinary activities after taxation                                      (387,396)      (232,025)

Opening Accumulated Surplus as previously reported                                 2,281,670      3,918,560

Prior year adjustment                                             5                1,404,865

Accumulated surplus as restated                                                    3,686,535      3,918,560

Deficit on ordinary activities after taxation                                      (387,396)      (232,025)

Retained accumulated surplus carried forward                                       3,299,139      3,686,535

All of the results for the year derives from the continuing activities of the company.

The financial statements were approved by the Board of Directors on
and signed on its behalf by:


                                                                                                              Annual Report 2008
The National Dairy Council

                                           The National Dairy Council
                                   Statement of total recognised gains and losses
                                      For the year ended 31 December, 2008

                                                                                               As restated
                                                                                       2008           2007
                                                                                          €              €

                   Deficit after taxation                                          (387,396)     (232,025)

                   Prior year adjustment                                     5     1,404,865

                   Total recognised surplus since the last annual report           1,017,469

Annual Report 2008
                                                                                              The National Dairy Council

                             The National Dairy Council
                                    Balance sheet
                              As at 31 December, 2008

                                                                                           As restated
                                                                                    2008          2007
                                                            Notes                      €             €


Tangible assets                                               6                 81,881         76,655


Debtors                                                       7                 238,088        79,479
Bank                                                                          3,135,343     3,820,067

                                                                              3,373,431      3,899,546

CREDITORS: (Amounts falling due within one year)              8               (156,173)      (289,666)

NET CURRENT ASSETS                                                            3,217,258      3,609,880

                                                                              3,299,139      3,686,535

Represented by:
ACCUMULATED SURPLUS                                           10              3,299,139      3,686,535

The financial statements were approved by the Board of Directors on 20 May, 2009,
and signed on its behalf by:


                                                                                                         Annual Report 2008
The National Dairy Council

                                               The National Dairy Council
                                                   Cashflow statement
                                          For the year ended 31 December, 2008

                                                                                             As restated
                                                                                     2008           2007
                                                                         Notes          €              €

                   Reconciliation of operating deficit to
                   net cash (outflow)/inflow from operating activities

                   Operating deficit                                             (347,099)     (194,681)
                   Add back depreciation                                            36,309        25,812
                   (Increase)/decrease in other debtors                          (158,609)       106,999
                   (Decrease)/increase in creditors                              (127,847)       215,067

                   Net cash (outflow)/inflow from operating activities           (597,246)      153,197


                   Taxation paid                                                  (45,943)      (35,062)

                                                                                  (45,943)      (35,062)

                   Financing activities

                   Payments to acquire fixed assets                               (41,535)      (83,909)

                   (Decrease)/increase in cash position for the year      10     (684,724)       34,226

Annual Report 2008
                                                                                                              The National Dairy Council

                           The National Dairy Council
                        Notes to the financial statements
                      For the year ended 31 December, 2008


     Basis of preparation
     The financial statements have been prepared in accordance with accounting standards generally accepted
     in Ireland and Irish statute comprising the Companies Acts, 1963 to 2006. Accounting standards generally
     accepted in Ireland in preparing financial statements, giving a true and fair view, are those published by the
     Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board.

     Basis of accounting
     The financial statements have been prepared under the historical cost convention.

     Income comprises of voluntary levies, donations and interest receivable.
     Income received in the form of voluntary levy contributions is based on a price per litre of milk produced
     and is recognised on a receipts basis.

     Expenditure is accounted for on an accruals basis.

     Depreciation of fixed assets is provided on a straight line basis as follows:

     Motor vehicles            20% per annum
     Office equipment          25% per annum
     Computer equipment        25% per annum

     The company operates a defined contribution pension scheme. Contributions payable to the scheme are
     charged to the profit and loss account in the period to which they relate.

     The company is exempt from Corporation taxation in respect of its activities.
     Passive income, if any, (such as deposit interest) remains taxable.

     Lease rentals in respect of assets held under operating leases are expensed in the period to which they relate.

                                                                                                                       Annual Report 2008
The National Dairy Council

                                           The National Dairy Council
                                   Notes to the financial statements (continued)
                                     For the year ended 31 December, 2008

                   2.   DEFICIT BEFORE TAXATION                                                          2008                    2007
                                                                                                            €                       €
                        The deficit before taxation is stated after charging:
                        Directors’ remuneration                                                         24,999                 14,333
                        Directors’ expenses                                                             23,483                 14,541

                        Auditors’ remuneration                                                          11,000                 11,970
                        Depreciation                                                                    36,309                 25,812
                        Operating leases                                                                 4,275                  3,780

                   3.   EMPLOYEES                                                                        2008                    2007
                                                                                                            €                       €

                        Wages and salaries                                                             382,854                418,789
                        Redundancy costs                                                               109,866                      -
                        PRSI                                                                            37,390                 39,845
                        Pension                                                                         16,898                 16,998

                                                                                                       547,008                475,632

                        The number of employees at year ended 31 December, 2008, including two directors, was seven (2007: 10).

                   4.   TAXATION
                        The company is not liable to taxation on the excess of its income over its expenditure.
                        Tax was paid on interest earned as follows:
                                                                                                          2008                   2007
                                                                                                             €                      €

                        Corporation tax @ 25%                                                           40,297                 37,334

                   5.   PRIOR YEAR ADJUSTMENT
                        In prior years, income from levy contributions was deferred for expenditure for a period of eight months
                        from its receipt. The company recognises income from levy contributions on a receipts basis in the year
                        which the levy contributions relates.
                        Income and Expenditure Account
                        Deferred revenue as previously stated                                                                1,404,865
                        Prior Year Adjustment                                                                              (1,404,865)


                        Balance Sheet
                        Creditors: (Amounts falling due within one year)                                                     1,694,531
                        Prior Year Adjustment                                                                              (1,404,865)

                        Restated                                                                                              289,666

                        Opening income and expenditure account as previously reported                                        (111,795)
                        Prior Year Adjustment                                                                                (120,230)
                        Restated                                                                                             (232,025)

Annual Report 2008
                                                                                                       The National Dairy Council

                       The National Dairy Council
               Notes to the financial statements (continued)
                 For the year ended 31 December, 2008

6.   TANGIBLE ASSETS                              Computer           Office               Motor
                                                 equipment       equipment               vehicles        Total
                                                         €                €                     €           €

     At 1 January, 2008                                 56,692       45,999               68,381       171,072
     Transfers                                        (26,589)     (41,802)                    -       (68,391)
     Additions                                          10,214       31,321                    -         41,535

     At 31 December, 2008                               40,317       35,518               68,381       144,216

     At 1 January, 2008                                 30,650        42,740              21,027         94,417
     Transfers                                        (26,589)      (41,802)                   -       (68,391)
     Charge for the period                              13,642         8,991              13,676         36,309

     At 31 December, 2008                               17,703        9,929               34,703        62,335

     Net book value:
     At 31 December, 2008                               22,614       25,589               33,678        81,881

     At 1 January, 2008                                 26,042        3,259               47,354        76,655

7.   DEBTORS: (Amounts falling due within one year)                              2008                     2007
                                                                                    €                        €

     Other debtors                                                             238,088                  79,479

                                                                                                    As restated
8.   CREDITORS: (Amounts falling due within one year)                            2008                      2007
                                                                                    €                         €

     Trade creditors                                                           100,763                 235,248
     Corporation tax                                                             2,957                   8,603
     Accruals and sundry creditors                                              40,648                  19,218
     PAYE/PRSI                                                                  11,805                  26,597

                                                                               156,173                 289,666

                                                                                                                  Annual Report 2008
The National Dairy Council

                                           The National Dairy Council
                                   Notes to the financial statements (continued)
                                     For the year ended 31 December, 2008

                   9.   PENSION
                        The company operates a defined contribution pension scheme. Contributions payable in respect of the
                        year ended 31 December 2008 amounted to €16,898 (2007: €16,998). There were no pension contributions
                        outstanding at the year end (2007: €Nil).

                   10. ACCUMULATED SURPLUS
                                                                                                                         As restated
                                                                                                        2008                   2007
                                                                                                           €                       €

                        Opening accumulated surplus as previously stated                           2,281,670               2,393,465
                        Prior year adjustment                                                      1,404,865               1,525,095

                        Accumulated surplus at the beginning of the year                           3,686,535               3,918,560

                        Deficit for the year                                                       (387,396)               (232,025)

                        Accumulated surplus at the end of the year                                 3,299,139               3,686,535

                   11. ANALYSIS OF CHANGES IN NET FUNDS
                                                     Opening balance                               Cashflow          Closing balance
                                                                   €                                      €                        €

                        Cash at bank and in hand                             3,820,067             (684,724)               3,135,343

                   12. OPERATING LEASES
                       The company had annual commitments under non-cancellable operating leases,
                       these leases were due to expire as follows:
                                                                                                        2008                   2007
                                                                                                           €                       €
                        Between two and five years – office equipment                                  4,485                   5,865

                   13. RELATED PARTY TRANSACTIONS
                       Certain directors of the company are also directors of the co-operatives from which the company receives
                       voluntary levy income. The total voluntary levy income received in the normal course of business from these
                       co-operatives amounted to €1,632,933 (2007: €1,670,998). The total expenses claimed by these directors for
                       the year ended 31 December, 2008 amounted to €8,109 (2007: €4,359). The directors held seven meetings
                       during the year ended 31 December, 2008 (2007: four meetings). There were four new board sub-committees
                       established during the period.

                   14. REPORTING CURRENCY
                       The currency used in these financial statements is the Euro which is denoted by the symbol €.

                   15. PRIOR YEAR AMOUNTS
                       For comparative purposes, certain prior year figures and disclosures have been reclassified
                       under different headings.

                       The financial statements were approved by the Board of Directors on 20 May, 2009.

Annual Report 2008
                                                                                                     NDC Board
                                                                                                    December 2008

                                                                                                         Dominic Cronin
                                                                                                        Chairman (ICMSA)

                                                                                      henry Corbally
                                                                                  Vice-Chairman (Glanbia)

                     eamonn bray      Jackie Cahill   Joe Collum   tom Corcoran   Sean Griffin     Patrick Kelly Richard Kennedy Kevin Kiersey   Sean McAuliffe    Mary Purcell    Gerald Quain     Conor Ryan
                     (National Milk     (ICMSA)        (Glanbia)      (ICOS)    (Barryroe Co-op)    (Donegal           (IFA)         (IFA)        (North Cork       (Centenary     (Kerry Group) (Arrabawn Co-op)

Annual Report 2008
                                                                                                                                                                                                                    The National Dairy Council

                       Agency)                                                                     Creameries)                                      Co-op)        Thurles Co-op)
                                                                                            NDC Board Sub-Committee
                                                                                            Marketing & Communications
                                                                                                  December 2008
                                                                                                         Dominic Cronin
                                                                                                                                              Prof. Damien
                                                                       James burke                                                          (Director - Mktg
                                              eamonn bray           (MD, James Burke &         Joe Collum                 Patrick Kelly    Development Prog.,   Gerald Quain
                                                                        Associates)                                                          Michael Smurfit
                                                                                                                                           Graduate Business
                                                                                           NDC Board Sub-Committee
                                                                                         School Milk & Dairy Programme
                                                                                                December 2008
                                                                                                          Dominic Cronin
The National Dairy Council

                                                                                                                                                                                            Annual Report 2008
                                               Philip Carroll                                                          noel Mooney
                                            (Principal Officer -                                                       (National Club
                                                                                             George Kearns
                                           Milk Policy Division,                                                      Promotions Co-
                             eamonn bray                               Joe Collum          (Secretary, National                               Mary Purcell      Gerald Quain   Conor Ryan
                                              Department of                                                          Ordinator, Football
                                                                                           Dairies Association)
                                           Agriculture, Fisheries                                                      Association of
                                                 & Food                                                                   Ireland)

                                                                               NDC Board Sub-Committee
                                                                          Accountability & Corporate Governance
                                                                                     December 2008

                                                                                             henry Corbally

                                                                          tom Corcoran                        Sean McAuliffe

                                                                                NDC Board Sub-Committee
                                                                              Issues Management & Nutrition
                                                                                      December 2008

                                                                                             henry Corbally

                                                        Dr. Pat Dillon
                                                                                                                                   Fiona Lalor
                                                      (Head of Centre,   Ciaran Fitzgerald                                                             Catherine
                                                                                                                                 (Research Asst.,                          Paula Mee
                                                          Teagasc,          (MD, Ciaran                                                               Lascurettes
                     Jackie Cahill   Dominic Cronin                                           Sean Griffin    Kevin Kiersey     School of Public                        (MD, Paula Mee
                                                      Moorepark Dairy        Fitzgerald                                                                (Executive
                                                                                                                               Health & Population                    Nutrition Consulting)
                                                       Prod. Research       Consulting)                                                              Secretary IFA)
                                                                                                                                  Science, UCD)

Annual Report 2008
The National Dairy Council

                 National Dairy Council
                Staff Organisational Chart
                      December 2008

                             helen brophy

         Lynda thompson

                                                                         National Dairy Council
                                                                      Function Organisational Chart
                                                                             December 2008

 Dr Catherine Logan          tara Mchugh     Joe Podesta

                                                                                  Chief executive


                                                           issues Management        School Milk       Marketing &
                                                               & nutrition       & Dairy Programme   Communications

Annual Report 2008

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