Dairygold defend closure of up to 22 local branches

Dairygold has rejected criticism of its decision to close up to 22 local branches which, it said, was just one part of a rationalisation programme now underway.

Considerable annual savings will be made on rationalisation of branches and on changes to the AI service which were implemented last week, a spokesman said. It was also hoped to make savings in the future on transport.

"All of this is necessary because of the increases in overhead costs,`` Jim Woulfe, general manager of the trading division said this week.

In relation to branch closures, he said that the co-op had to embrace change. "The number of suppliers is falling as is the case in all co-ops. Major inputs are now being delivered directly to farmers, for example feed and fertiliser.``

The co-op`s network of branches had resulted from a series of amalgamations and was not what would be needed to give farmers a service over coming years, he said.

"We can`t have a double system of both stores and repping,`` he said "Our competitors don`t. Having a network of smaller branches that are no longer viable or are approaching being not viable won`t serve the society well in the longer term.``

He said he understood the concerns of farmers but that the co-op was still determined to cater for all of suppliers` needs in an efficient way.

Customers of the 22 branches that are to close tomorrow (Friday) were written to by Dairygold earlier this month, the letter explaining the reasons for the changes.

"The rationalisation of our Branch/Store Outlets is necessary for long term viability,`` the letter stated. "I wish to assure you that our other local Stores and your area manager will endeavour to cater for all your Agri Input needs,`` Woulfe said in the letter.

Dairygold`s AI technician service switched to a contract basis last week. Negotiations with the technician`s union have been taking place since October.

The co-op is now conducting a detailed examination of transport and other aspects of the agri-business.

Welcome for lift in casein aid

There was welcome for the increase in EU casein aid that was agreed at last week`s meeting of the EU dairy management committee. The meeting increased casein aid levels from €5.86 per 100kg to €6.7, a rise of over 14%. The increase will come into effect on the third day following publication in the EU`s Official Journal. The meeting decided not to increase export refunds for WMP and SMP.

ICOS director general John Tyrrell welcomed the increase but expressed disappointment that export refunds had not also been raised. "Returns in the milk sector are still at a relatively low level due to depressed international prices, the weakness in the US dollar compared with the euro and weak prices for SMP, butter, WMP and casein,`` he said. "Today`s decision simply counteracts part of the recent currency weakness of the US dollar.``

Minister for Agriculture Joe Walsh welcomed the move and said it was a speedy response by the Commission to his recent request for an increase in the aid rate which he had made following discussions with the industry.