The Irish Creamery Milk Suppliers Association (ICMSA) is recommending that Glanbia Co-op shareholders vote yes on Friday to bring Glanbia Ireland under the full control of the co-op board.
Announcing the association’s position, president Pat McCormack said the co-op board must then “repay in full the trust placed in them by farmers”.
Voting on a series of related resolutions will take place at an online special general meeting (SGM) of Glanbia Co-op on Friday 17 December at 2pm.
The first two resolutions detail the intention to acquire the 40% plc share in Glanbia Ireland and to set up a member distribution reserve. Both need over 50% to pass.
McCormack said that depending on the outcome of Friday’s vote, Glanbia will have gone full circle from a co-op to a plc to a joint venture and, in the event of the vote being carried, ending up back as a co-op.
“Over that period, farmers have experienced ‘ups and downs’ with Glanbia.
“The current proposal has sparked considerable debate around key issues like the funding of the proposal, the commitments on milk price and the use of the investment fund.”
The Tipperary dairy farmer said that following numerous meetings with Glanbia Co-op, the ICMSA now believes that sufficient flexibilities are available to the co-op in relation to funding the proposal and taking account of stock market developments.
“Assurances have been received in relation to the use of the investment fund with the shares not being sold until a strong proposal is in place that will deliver better returns and, in turn, a better milk price for farmers.”
McCormack insisted milk price is the key to farmers’ feelings and intentions on the Glanbia deal.
“Based on the analysis available through the ICMSA milk tracker, Glanbia has underperformed in recent years and needs to move up the milk league and deliver a consistent strong milk price to its suppliers.
“The proposal's removal of the 3.2% guaranteed profit margin and the dividend payment to the pls presents a clear opportunity for the new entity to pay a stronger milk price.
“Glanbia needs to be at the top of the league in a clear and transparent way.
“While there is no definite commitment on milk price, placing the business in a co-op structure makes sense and farmers will have control.”
He insisted that the Glanbia board and management have given a clear commitment that they intend to perform strongly on milk price.
“[The] ICMSA believes that Glanbia shareholders should register to vote by the deadline and vote in favour of the proposal on Friday.”