The Irish Farmers Journal understands that the board of Kerry Co-op is investigating how to fund and manage the acquisition of Kerry Group’s dairy business.

Sources close to the board suggest the co-op is looking at hiring someone for a full-time position to deal with the project. External consultants are working with co-op directors to help establish the future vision for Kerry Co-op.

Separately, in recent weeks, the High Court has heard the legal case put forward by Revenue on a point of law following a ruling in favour of the co-op made in July 2020 on patronage shares.

Sources close to the case said it is not known exactly when the result of the High Court challenge will be available but a decision is likely within the next six weeks.

The Kerry patronage share debacle has been ongoing for over five years.

The legal case centres around the classification of patronage shares as income or assets and subsequent tax compliance for suppliers.

Kerry milk suppliers received the shares as a result of trading.

State pension

Meanwhile, milk suppliers in Kerry who have recently applied for a State contributory old-age pension and who also received patronage shares from Kerry Co-op over 10 years ago have been told they don’t qualify for a State contributory old age pension.

In a letter from the Department of Social Welfare seen by the Irish Farmers Journal to a Kerry milk supplier, it suggests that self-employed contributors shall not be regarded as satisfying the qualifying conditions for a pension unless all outstanding self employment contributions are paid.

The letter stated the milk supplier in question had not fulfilled all conditions and had outstanding self employment contributions to make from the years 2012/13.

This is despite the fact that the farmer in question had a tax clearance cert.

The letter makes no specific reference to the ongoing legal case over the classification of patronage shares as income or assets.

However, the milk supplier suspects the patronage share debacle and the fact he has is not qualified for the pension are linked.

The ongoing case over the classification of patronage shares as income or otherwise is still undecided.

Background

Kerry milk suppliers received patronage shares in 2012 and 2013 for trade with the co-op. In 2017, a test case was heard by the Tax Appeals Commission to establish if patronage shares were classified as income or assets.

In 2020, the court ruled patronage shares were a personal and non-assignable right and, as such, did not have any value which constituted a trading receipt to be taken into account when calculating the full amount of his profits or gains in the year of assessment.

Co-op boss

Since taking over the role from Mundy Hayes, the relatively new Kerry Co-op chair Denis Carroll has been vocal in his support for trying to make something work with Kerry Group for the dairy processing facilities.

He stated his first priority was to agree the 2021 milk payment top-up, which was made in the March milk cheque.

Following a calculation error in the payout of this, some milk suppliers were reimbursed in the days following the March milk cheques. Those overpaid have had an amount deducted from the April milk cheque that was paid this week.

Kerry Co-op board members and the 160 advisory members of Kerry Co-op are due to meet in Listowel on 10 June to mark the 50th anniversary of the establishment of milk processing by Kerry milk suppliers.