Glanbia Co-op’s AGM was held on Wednesday morning. Milk price and where it’s heading was the main concern for most.

However, a minority of shareholders couldn’t have cared less about milk price, apart from one aspect – the continuing use of co-op funds to support the price paid by Glanbi Ireland.

Recent ICSA beef chair Edmund Phelan has become the spokesman for a group which says it represents the views of the 10,000-odd non-dairy farmers – the so called dry shareholders.

Unless they had traded significantly with Glanbia, in recent years, such shareholders were not even able to attend the AGM.

Glanbia says all co-ops are supporting milk price when commodity prices slump. It’s just their support is externally provided and visible. The source of funds is also visible and sustainable – the dividends received from the plc and from Glanbia Ireland. Between them, about €35m will be handed over to the co-op in 2018.

Dry shareholders

Phelan says dry shareholders supported the use of co-op funds to buy 60% of the Irish business partly due to the promise that a dividend would be paid back for the benefit of co-op members, but most of that revenue is now directed to milk producers. Glanbia’s reply is that over 90% of the co-op voted in favour of this model in Punchestown last year, when it was made clear that a support fund would be created. This fund also pays out on grain sales and meal and fertiliser purchases.

And that brings us right back to the beginning, because Phelan’s point is that most co-op members were not entitled to vote on that matter. The co-op is being run by the minority, and to their own ends. The plc and co-op boards and management overlap.

Meanwhile, co-op members of Lakeland or Dairygold watch on like GAA county players listening to premiership footballers complain that they are only on €50,000 a week.

All Glanbia Co-op shareholders have been well rewarded for their original investment, with spin-outs delivering over €700m in plc shares since 2012. About €600m of that was evenly shared out among all shareholders, while Glanbia’s growth means the co-op’s latent value still rises. Glanbia and its parent co-ops Avonmore and Waterford were founded as dairy co-ops, and their ethos is to support dairy farmers. Everyone who joined knew that.

Many co-ops only offer face value for shares on surrender. Glanbia have paid €5 for £1 shares. Not perfect, but not terrible either.