BICO pledges long-term role in milk market amid tariff threat

Ice cream maker BICO Limited has vowed to stay in the milk business, even as it faces the prospect of higher costs for milk powder from new US tariffs and explores domestic sources to safeguard supply.

As it prepares to navigate possible fallout from US tariffs that could affect the cost of the key ingredient of its reconstituted milk product, the company said Tuesday it is also in preliminary talks with the Barbados Agricultural Society (BAS) to explore the possibility of sourcing milk here.

Supplies of fresh milk from dairy farmers to the island’s lone dairy processor, Pine Hill Dairy, have fluctuated wildly during a crisis affecting domestic herds, leading to an importation drive for new dairy cattle. The 126-year-old ice cream and cold storage firm entered the liquid milk market last year when Pine Hill Dairy experienced a disruption in production, joining competitors from Guyana to put reconstituted milk on supermarket shelves nationwide.

BICO General Manager Audley Grimes told Barbados TODAY that while the company does not intend to compete head-on with Pine Hill Dairy, it has moved beyond being a short-term supplier and now intends to be a consistent presence in the industry.

“We will be a permanent player in the market. [While] we’re not looking to take over the market… we see that there is room for us to be a player,” he said.

“Our intention at this point, in the short-to-medium term, is to just continue the supply of milk and pretty much be a player in the market.”

Grimes noted that early demand for BICO’s reconstituted milk was so high that the company struggled to keep up.

“Initially when we started, we weren’t able to keep up with the demand,” he said. “Since Pine Hill came back into the market, our sales did drop a little bit, but that was anticipated.”

Customer response to BICO milk has been largely positive, with many embracing the product as a reliable alternative, Grimes declared.

But BICO’s long-term plans to move beyond its initial role as a stopgap could be undone by developments overseas.

Grimes confirmed that the company was closely monitoring the potential impacts of recently announced US tariffs, which could affect the price of imported milk powder used in production.

“Obviously, the tariffs are a major concern for us…. We’ve been working very diligently to diversify our supply chain, and we’re looking at new products not only in milk but across other business lines,” he said, adding that the company is exploring import options from other countries.

In addition to these measures, BICO is considering developing a local supply chain by sourcing milk powder from Barbadian farmers.

“We did reach out to the CEO of the Barbados Agricultural Society. We had some preliminary discussions. When our chairman, who is travelling, returns, we’ll continue that conversation and hopefully chart a way forward,” he said.

This development comes just weeks after the BAS publicly criticised BICO for importing reconstituted milk to supplement the national shortfall, with CEO James Paul warning that such imports could undermine local dairy farmers who are already struggling to maintain supply levels.

Speaking on news of BICO’s intentions, the BAS official welcomed the idea, describing it as a promising opportunity for Barbadian farmers.

“I’m hearing now that BICO is willing to work with local farmers… which is good,” Paul said.

“Certainly, I am sure the industry would want to have that discussion with BICO, and farmers would want to have that conversation to see how we can cooperate in terms of increasing overall milk production.” 

shannamoore@barbadostoday.bb