The Dealer is watching with interest as the ration wars heat up in the east and midlands and I’m wondering what is it all about.

Why are merchants and feed suppliers such as Glanbia squabbling over what I’ve always been told is a low-margin product such as feed, attempting to undercut prices and lock in loyalty.

John Grennan & Sons is doing its bit to put the cat among the pigeons with the option to fix milk price instead of Glanbia – and you don’t even have to buy any feed from them.

In fairness, Glanbia isn’t the only milk processor trying to lock in loyalty. Dairygold attempt to do it in the South – to get on any sort of a position on a regional committee, not to mind the co-op board, you have to buy all, or as good as all, your supplies from a Dairygold store.

Bonus

The west Cork co-ops pay a bonus on all purchases through local stores. OK, so I agree, these loyalty plays are not as blatant as paying back €30 per tonne of feed purchased once you sign up to buying all your feed from Glanbia, but, nevertheless, they are a form of loyalty scheme.

One deep throat that The Dealer hears from every now and again suggested there is more than loyalty at play in this Glanbia move. They suggested Glanbia is trying to put a pool of suppliers together that are locked into selling milk and purchasing feed from them.

The next move by Glanbia will be to tweak the feed ingredients so that it’s guaranteed, for example, maybe GM-free. Then Glanbia will go and sell that to the world as their recently released website on Truly Grass-Fed milk promotes GMO-free and antibiotic-free milk.

Questions

The Dealer has a number of questions. It would probably cost more to put together a GM-free dairy feed, but who pays for that – Glanbia or the farmers who have locked in? Will the farmers in this milk pool get a bonus for this GM-free label? Does Glanbia think it will get a premium in Germany on top of the Kerrygold premium? How will the consumers buying Irish product react when faced with purchasing Truly Grass-Fed butter side-by-side with Kerrygold butter?

I’d love to be a fly on the wall of the Ornua boardroom to hear the conversation between Kevin Lane and Jim Bergin as Jim attempts to explain he’s going to sell butter into Germany and the US under the Truly Grass-Fed banner, not the Kerrygold banner.