The battle over Kinisla’s milk supply contract has intensified this week, with the Munster Dairy Producer Organisation (MDPO) taking it to Europe.

The MDPO confirmed that it is to meet with senior officials of the Commission’s dairy division on Thursday to discuss the operation of EU legislation governing supply contracts for farmers.

The online meeting comes ahead of a looming deadline for Kinisla farmers to a sign a new contract with the processor by 4 August.

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Kinisla insisted last week that it is not obliged to collect milk from any supplier who has not signed its milk supply and purchase agreement by 4 August, even if the supplier is a member of Kerry Co-op.

However, the MDPO – which primarily represents Kinisla suppliers – remains opposed to the new contracts.

The producer organisation questioned whether the purchaser of Kinisla’s milk, Kerry Creameries Limited (KCL), qualified for a derogation which exempts co-ops from the EU Common Market Organisation (CMO) regulations around farmer contracts.

The MDPO questioned whether KCL qualified for the derogation since it does not set the price paid for the milk it purchases, and claimed that it is not democratically controlled directly by farmers.

“While KCL is the purchaser of the milk it does not determine the price of milk to be paid to dairy farmers. The price is determined by a limited private company [Kinisla] owned by Kerry Co-operative Creameries Limited and Kerry plc – a listed public company,” said MDPO chair James Doyle.

In addition, the MDPO maintained that the rule book of KCL classified milk suppliers as B shareholders who are not entitled “to receive notice of, or to attend or vote at the general meeting of the society”.

Kinisla has pointed out that KCL is a wholly owned subsidiary of the processor, which is itself 70% controlled by the farmer-owned Kerry Co-op.

Moreover, it has stated that KCL was the contracting entity for the previous milk supply contract.