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With field staff active in recent weeks, and free buses put on, in the end there was a large turnout of shareholders at the special general meetings held by both LacPatrick and Lakeland co-ops on Tuesday to vote on their plans to merge.
The deal was backed by over 95% of shareholders at both meetings, a massive endorsement, which now clears the path for new structures to be put in place from early next year. It will create the largest milk buyer in NI, with an estimated milk pool of 1.2m litres.
But before that, the deal must receive clearance from competition authorities on both sides of the Irish border.
Speaking to the Irish Farmers Journal, Lakeland CEO Michael Hanley said he was confident that there are no major competition issues to be resolved. He described the vote as a “great day” for shareholders and dairy farmers supplying Lakeland and LacPatrick, which will mean that the new co-op is now well geared up for whatever Brexit brings.
A figure often quoted in the context of Brexit is the 600m litres of NI milk that goes South each year for processing.
The vast majority of that is Lakeland milk, but with LacPatrick’s milk drying plant at Artigarvan capable of processing 600m litres annually, the merger deal largely solves that particular Brexit conundrum.
Upbeat
Despite the upbeat mood, particularly at the Lakeland SGM, Hanley also acknowledges that some tough decisions lie ahead for the future management team and board of the new co-op.
“There are challenges in the new business as not all parts are profit making,” he said.
Traditionally, Lakeland has sought to sweat its processing asset, so if any part of the new business is not operating efficiently and producing a product where there is opportunity for growth, then rationalisation might be necessary.
In the interim period it also looks likely that Lakeland suppliers in NI will be required to take on Red Tractor assurance.
To this point, as Lakeland has not been directly servicing UK retail customers, it has not asked farmers to join the scheme. But with LacPatrick comes a retail milk and butter business that requires milk to be farm assured.
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