Milk price deal an 80% win, says Kerry chair

Questions over the proposed resolution to the leading milk price issue, the condition of milk-processing facilities and the tax implications of the deal, dominated discussion at the Kerry Co-op meeting on the deal to buy Kerry Dairy Ireland, held in Charleville on Tuesday night.

When asked from the floor as to why the leading milk price issue wasn’t being dealt with separately, co-op chair James Tangney said he would prefer if it was, but said this was the deal being put forward by Kerry Group and in any negotiation – there’s compromise.

“If there is no deal, there is no 5.4c/l on the table to be paid next January and that’s an 80% win [on what suppliers feel they are owed]. Nobody in this room can say that 5.4c/l is not a good result in arbitration,” he said.

This point was supported by legal adviser Jamie Olden from RDJ law firm, who said that arbitration could go on for years.

He said that senior counsel Paul Gallagher advised the co-op board that there is a chance they could get a lot less if they return to arbitration as the specifics are so complicated.

On the subject of facilities, adviser to the co-op, Jim Woulfe said that he’s heard a lot of commentary about the plants and he agreed that the plants are old, but said so too are aspects of Dairygold facilities in Mallow and Mitchelstown.

“Anything that has a long history of production, of course it’s subject to age. The first thing is the Kerry plants are fully compliant. You might say that’s a very low hurdle, and it is, but the blue-chip customers that buy off Kerry Group are far more demanding in terms of standards, hygiene and the physical properties of the buildings. All I’ll say to you is, you’ve been harsh on your own facilities,” he said.