The long-awaited leading milk price payment is currently hitting Kerry suppliers’ bank accounts.

However, the payment is not without controversy, as a group of suppliers has claimed the €50m collective lump sum is €2.43m short.

Chair of the Munster Dairy Producer Organisation (MDPO), a group of Kerry suppliers operating as a PO, James Doyle claimed when the payment was negotiated as part of the deal to buyout Kerry Dairy Ireland it was understood to be VAT exclusive, meaning the full €50m would land with suppliers.

The fact that it was paid VAT inclusive, with suppliers to collectively receive €47.57m, is “totally unacceptable to suppliers”, Doyle said.

“Many farmers who had expanded their milk output over the last decade are very disappointed that the actual payment from the compromise fund they have received in the last few days can be as low as 2c/l, and nowhere near the 5.4c/l that was emphasised during the lead up to the vote on the joint venture last December,” he said.

Price dispute

As part of the deal, 5.4c/l was offered to settle the leading milk price dispute, paid out on average annual solids from 2015 to 2020 on contracted milk.

A spokesperson for Kerry Dairy Ireland – the joint venture between Kerry Co-op and Kerry Group – confirmed that the value of leading milk price payments issuing to suppliers is VAT inclusive.

“The fund is allocated in full and in accordance with the milk supply contract,” the spokesperson added.

At an information meeting in Ennis prior to the vote on the buyout of Kerry Dairy Ireland by Kerry Co-op from Kerry Group, chair of the co-op James Tangney said there are no conditions linked to the €50m leading milk price lump sum.

“[For] the payment there will be a fund of €50m transferred to Kerry Dairy Ireland and that fund will be paid out to farmers in January.

“It will be paid on solids and it will be paid on the years in question. There will be a percentage to each year, that 5.4c/l will be allotted over those years.

“There is no other stipulation on it, it will be paid in full on the clause 5.1 of the contract. I can guarantee that. There are no other clauses whatsoever,” he said at the time.