Late last week, news began to filter out that Mundy Hayes had held on to his position as chair of Kerry Co-op following a postal ballot of the 21 members of the co-op board. It’s understood Hayes fended off the challenge of west Kerry dairy farmer Pat Rohan, winning 12 votes to nine.
Last week’s vote was the first time in his tenure that Hayes has been challenged by another member of the board for the position as chair.
Having over 40% of the electorate vote against you is hardly a convincing mandate
And while Hayes immediately moved to put a brave face on it stating he had been “convincingly reappointed” as co-op chair, the reality is the result of the vote only further illustrates the deep division within the board of Kerry Co-op.
Having over 40% of the electorate vote against you is hardly a convincing mandate. As has been extensively covered in the Irish Farmers Journal, this is a critical period in the history of Kerry Co-op, with billions of euro on the line for shareholders.
Also tied up in these negotiations is the tricky issue of Kerry Co-op shares
Over the last year, Kerry Co-op has been engaged in complex negotiations with Kerry Group over the future relationship between the two entities. The main deal on the table is the chance for Kerry milk suppliers to buy a 60% stake in Kerry Group’s primary dairy business, which is understood to have annual sales of €1.2bn and makes profits of €80m to €100m per year.
Also tied up in these negotiations is the tricky issue of Kerry Co-op shares and how they are taxed by Revenue (they are currently taxed as income).
The original proposal put forward was one that would see Kerry Co-op liquidated and the majority of the shares it holds in Kerry Group plc spun out to its 13,000 shareholders under a capital gains tax arrangement.
It’s sounds straightforward but there is resistance to this idea by some who wish to preserve Kerry Co-op as an entity and continue the share redemption scheme in operation since 2019.
It’s understood the talks between Kerry Group and Kerry Co-op have stalled in recent months because the co-op side is still trying to find out a workable solution to this very issue.
The division in the board of Kerry Co-op, illustrated more clearly than ever by the vote for chair, reflects the frustration from many quarters that time is being wasted and the clock is ticking on the negotiations with Kerry Group.
If there is any mandate for Mundy Hayes out of last week’s vote, it’s that he and Kerry Co-op need to get moving.