DEAR SIR: After much speculation on the above topic, I commend the Irish Farmers Journal on opening a discussion forum. I am now a dry shareholder who supplied milk for 40 years. I bought into this co-op from the beginning and welcome this opportunity to give my viewpoint. I wish to highlight the following:

  • Kerry Co-op holds €70m in cash (this also belongs to shareholders). As per the last set of accounts, 2019, there was €49.9m in cash. Since then, Kerry Co-op’s share of IPL Plastics has been sold for €16m, and retained value from the redemption scheme in 2020 is approximately €4m.
  • The true conversion rate of co-op shares to plc shares is 6.12, not 5.9. The difference between paying out 5.9 v 6.12 plc shares per co-op is €100m. This is retained by the co-op. The conversion rate was reduced to 5.9 under the share redemption scheme. This was tolerated, but any further haircut to the conversion rate beyond 5.9 would be unacceptable. Some 65% of shareholders voted to uphold this conversion ratio limit.
  • I am a beneficiary of the share redemption scheme. As a retired man, I have boosted my income using this scheme, cashing in on shares while still keeping myself on the lower rate of tax. I want this scheme to continue. If the redemption scheme is complemented by a capital gains event, I would support it provided the conversion ratio remained at 5.9.
  • Over 75% of Kerry Co-op shareholders are not milk suppliers. Why should we pay for milk processing facilities? I am not a charity buying milk processing for milk suppliers. Raising this money is not my concern. It should not be my money. Even accepting 5.9 as the ratio, I am accepting giving away the €70m held in cash and nearly another €100m in share value; €170m is more than one-third of the €480m required to buy the 60% shareholding. I don’t think it is too much to ask that the milk suppliers finance the other two-thirds required to buy milk processing for themselves.

    Let the next generation of farmers take ownership and responsibility of their business. Let those of us who have helped bring the co-op to where it is today reap the rewards.