After the recent unfortunate events at Glanbia and Golden Vale's slow struggle to turn itself into an added-value foods company, Current Account notes that the Irish Co-operative Organisations' Society (ICOS) once again is trying to knock heads together and inject some commercial sense into the Irish dairy industry.

ICOS director-general, John Tyrrell, has for years been preaching to his members about the need for a more commercial approach in the industry.

ICOS has always been careful not to get too involved in the question of milk price, presumably on the basis that that's a matter for each individual co-op. But that may change - reading between the lines of this week's statement from ICOS that it is to carry out a strategic review of the milk sector "to identify the key areas where change will be required".

Apart from the merger that created Glanbia and the Dairygold merger a few years ago, the Irish dairy industry seems to have been blithely indifferent to events in the world industry, where US, European and Antipodean processors are being created with milk throughput bigger than the entire Irish milk quota. Add in the pressure from the giant multiples - the main reason for Glanbia's exit from the British milk industry - and the dangers to the Irish industry are two-pronged.

No doubt there are marketing and distribution issues to be addressed when it comes to doing a strategic review of the dairy industry, but the single most important factor is that the Irish dairy industry is paying too much for its primary raw material - milk. The price farmers receive for milk bears little relation to the price that dairy commodities command on world markets.

It's fine for the likes of Kerry to subsidise its milk suppliers - as Kerry's Irish milk business accounts for only 10 per cent of its activities. But the other dairy companies - whether they are plc or coop - do not enjoy that luxury and are going to have to get used to the idea sooner or later that they cannot indefinitely pay their milk suppliers uneconomic prices for their milk. Something has to give.