Dairy co-op Tirlán has been accused of sabotaging Irish butter exports by signing a deal with US retailing giant Costco to sell butter under Costco’s private label, putting itself in direct competition with the State’s flagship brand, Kerrygold.Farmers’ groups, including the Irish Farmers’ Association (IFA) and Irish Creamery Milk Suppliers Association (ICMSA), claim the move could result in a “race to the bottom” at the expense of producers here.Tirlán’s Costco butter will be sold at about $6 (€5) a kilogram, substantially cheaper than the Kerrygold equivalent.Tirlán, which separately supplies Kerrygold owner Ornua and is Ornua’s biggest shareholder, defended the move, saying it was responding to a growth in demand for private label grass fed butter. “It should be noted that those developments are market-led and extend beyond any single supplier, source country or brand,” it said.“When opportunities arise that create additional value from Irish grass-fed milk and complement existing routes to market, Tirlán has a responsibility to evaluate them carefully on behalf of our members,” it said.Tirlán has agreed a multiyear contract to supply grass-fed butter from its Ballyragget plant in Kilkenny for sale through Costco’s private-label brand (Kirkland Signature).Cost-of-living pressures have meant private-label brands increasing their market share in the US to 33 per cent. Kerrygold, the Republic’s first billion-euro food brand, commands a 9.5 per cent share in the US.The IFA and the ICMSA met representatives of Tirlán on Monday, meetings the co-op described as constructive.But ICMSA leader Denis Drennan said dairy farmers were increasingly angry at the potential damage being done in the US butter market due to nearly direct competition between Ornua and Tirlán, particularly with the price of milk below the cost of production.“The potential self-destruction that is developing at marketing level in the Irish dairy sector is ridiculous and it won’t be the executives concerned who suffer: it’ll be the dairy farmer,” he said. IFA leader Francie Gorman said: “The vast majority of Irish farmers supply Ornua, both Tirlán and non-Tirlán suppliers. The return to these farmers cannot be undermined. We cannot allow a race to the bottom that ultimately destroys the margin being returned in farmers’ milk cheques.” Costco’s Kirkland label has an annual turnover (across all categories) of about $80 billion. The retailer requires additional volumes of grass‑fed butter for the label. As part of its strategy to strengthen supply‑chain diversification, Costco sought to add a non-New Zealand supplier to its supply chain, hence the Tirlán deal.Despite being its largest shareholder, Tirlán, formerly Glanbia Co-op, is frequently at loggerheads with Ornua. It launched its own dairy brand, Truly Grass Fed, in the US in 2019 just when Ornua and Kerrygold were embroiled in a court case about its own grass-fed credentials.Tirlán contends that sales of Kerrygold and Truly Grass Fed have risen in recent years. Ornua reported a 5 per cent rise in operating profits for last year despite what it described as “highly challenging” trading conditions in the US with “tariff uncertainty” and food price inflation anchoring the market there.Ornua chief executive Conor Galvin has warned that US president Donald Trump’s tariffs could cost the group up to €50 million a year.