It is critical that farmers, who supply to Kerry Co-op, are fully consulted on a joint venture before it finalises a deal.
That is the view of IFA president, Tim Cullinan, who described the proposed joint venture as a “huge decision” for Kerry Co-op.
Reports indicate that negotiations on a joint venture arrangement between Kerry Co-op and Kerry Group plc are nearing a conclusion.
“Any such arrangement will have a significant impact on milk suppliers. Farmers have to be fully consulted prior to any deal,” he said.
“The relationship between a milk supplier and their processor is a unique one given how perishable milk is and the difficulties in moving milk processor,” he said.
Consultation with farmers
He said a decision to fundamentally change one of the country’s largest milk processors’ ownership structure has to be undertaken in full consultation with the impacted farmers.
“They want adequate safeguards to make sure all their milk will be collected, processed and well paid for, regardless of current or future ownership structures.”
“We understand the commercial sensitivities that surround negotiations during the due diligence process. However, once this is concluded, farmers must be given all the necessary information on the joint venture to allow them to assess the proposal fully.”
The farm leader highlighted the importance of engaging with farmers before any final decision is made on a joint venture.
“Any joint venture will be dependent on long-term supply of milk from farmers in the south-west. They must be given the chance to have their say on any deal before it is finalised.”
Meanwhile, in other dairy-related news, the IFA has said both Glanbia and the Government have a responsibility to milk suppliers who will be impacted by Glanbia’s peak milk supply policy.
Cullinan said that a core principle of the Glanbia Milk Supply Agreement/contract is that all the farmers’ milk will be purchased at the price set by the Glanbia Ireland Board.
“Saying that a proportion of milk will not be purchased, or will be purchased at a penalised price, due to no fault of the farmer, is not consistent with the Milk Supply Agreement,” he said.
“The processing capacity issue must be dealt with on a voluntary basis in full co-operation with individual farmers.”
“In this regard, the proposals around the voluntary retirement scheme and the voluntary milk reduction scheme should be expanded and funded by Glanbia Ireland to try and address the problem.”
“Glanbia must be prepared to accept reduced profits for the next three years to fund some of these voluntary measures,” he added.