Tesco to sell "wonky" vegetables in a bid to cut food waste
Tesco is to sell irregular shaped carrots and mushrooms which would usually be thrown away.

IFA Horticulture Chairman Gerard Reilly says Tesco's move to purchase and sell irregular shaped vegetables has the potential to cut waste at farm level and to increase the proportion of produce farmers can sell for consumption.

Named "Wonky Veg", Tesco today announced they will sell carrots and mushrooms in specially marked "Wonky Veg" packs. This will give shoppers the opportunity to choose which vegetables they would like to purchase, rather than the supermarket rejecting them because of their irregular shape or size.

Every year millions of kilos of vegetables are thrown away or used as animal feed if they are classified as an irregular shape or size. Tesco Ireland buys nearly five million packs of Irish carrots every year sourced from two growers; Leo Dunne in Co Laois and John Dockrell’s in Co Wexford. Closed cup mushrooms are sourced from Codd Mushrooms in Co Carlow and Kerrigan’s Mushrooms in Co Meath.

One of the 50 Irish suppliers that showcased food products at the Tesco tent at the 2014 National Ploughing Championships, mushroom grower Leslie Codd welcomed the move by Tesco. He said: “Every year Irish vegetable growers discard millions of kilos of produce on the grounds of appearance. The reason for this is that customers have become used to buying perfect looking vegetables.

"The reality of the situation is that the 5-10% of vegetables that never make it to the retail shelf are perfectly fine. They may look a little bit odd, or wonky, but they taste every bit as good as the perfect looking produce we are used to buying. If customers bought this wonky looking veg more, it would greatly reduce wastage at farm level,” he added.

Tesco Ireland’s Fresh Buyer, Sinead McDonogh, commented: “These wonky veg mushrooms and carrots might not win a beauty contest but they are perfect for juicing or Autumn stews. There is scope for us to add more fruit and vegetables to this wonky veg line in the future but we will trial the offer first with carrots and mushrooms with a view to expanding the range depending on the response from customers. We don’t want our customers to compromise on quality, wonky veg just looks slightly different on the outside.”

However, IFA's Reilly also warned that returns to growers are currently at or below the cost of production, leaving no margin for reinvestment, weather issues or variable yields. "If the major retail multiples in this country are serious about having a sustainable fresh produce sector and ensuring a reliable supply of safe, home-grown food, they must show greater responsibility and offer a fair price to growers," he said.

Money flows into plant-based burger companies
Two of the largest plant-based meat companies haves raised more than $0.5bn in the last few weeks.

Following on from plant-based burger company Beyond Meats’ stock market flotation two weeks ago, which raised $240m, its rival Impossible Foods has raised $300m this week.

This recent equity raise by Impossible Foods brings the company’s total equity raised to $750m and values the California-based company at about $2bn. The fund raise comes after it announced a partnership with Burger King in the US to roll out the “Impossible Whopper”.

Beyond Meat had an explosive public debut, with shares soaring 163% on its first day of trading

Impossible Foods has struggled to keep up with increased demand, with restaurants selling the Impossible Burger facing shortages in recent months.

Beyond Meat had an explosive public debut, with shares soaring 163% on its first day of trading. The initial public offer price valued Beyond Meat at $1.5bn. Since then, Beyond Meat’s share price has almost trebled, giving the company a market capitalisation of about $4bn.

Impossible Foods has raised rounds of $75m and $108m from investors including Google, Hong Kong billionaire Li Ka-shing’s Horizons Ventures, and Bill Gates.

Share redemption scheme opens at Kerry co-op
Lorcan Allen outlines the details in the new share redemption scheme being proposed by Kerry co-op.

On Monday this week, the application window for Kerry Co-op’s share redemption offer, known as the “cash for shares” scheme, opened for all shareholders in the co-op to apply. This is a voluntary scheme for shareholders and the application window will remain open for just over three weeks until Wednesday 5 June.

The scheme is designed to act as a new mechanism to give liquidity to Kerry Co-op shares, ie to make it easier for Kerry Co-op shareholders to sell their shares. At present, Kerry Co-op shareholders are effectively “locked in” as there’s no official market for trading shares.

Shareholders will vote at the AGM of Kerry Co-op on 19 June in Tralee on whether this new scheme should be approved. Kerry Co-op is still working with ICOS to establish whether this scheme needs a 50% or two-thirds majority to pass a shareholder vote.


Shareholders will also vote to change a rule in Kerry Co-op that will allow the board to reduce its stake in Kerry Group plc below 10%. The co-op currently holds a 13.7% shareholding in Kerry Group plc.

There are 13,335 shareholders in Kerry Co-op (see Figure 1), who hold just over 3.9m Kerry Co-op shares between them.

The average shareholding among A and B shareholders is believed to be around 400 shares

Of this total, 25% are what are known as A shareholders (active farmers). A further 25% are deemed to be B shareholders (retired from farming in the last five years), while the majority, or 50% of shareholders, are C shareholders (non-farmers).

Only A and B shareholders may vote at the upcoming AGM in June. While C shareholders cannot vote, they are eligible to participate in the redemption scheme.

The average shareholding among A and B shareholders is believed to be around 400 shares, which have a combined value of approximately €250,000. Some shareholders have as many as 4,000 shares, which would be valued at €2.5m.

What is a share redemption scheme?

The share redemption scheme put forward by the board of Kerry Co-op will allow shareholders to redeem their co-op shares in return for a cash payment.

Kerry Co-op will then cancel these shares.

One share in Kerry Co-op is roughly equal to six shares in Kerry Group plc

The cash value of Kerry Co-op shares will be linked to the current share price of Kerry Group plc as shares in Kerry Group plc are the primary investment of Kerry Co-op.

One share in Kerry Co-op is roughly equal to six shares in Kerry Group plc, meaning the value of a Kerry Co-op share is around €600 based on Kerry Group plc’s share price this week at €103.

If passed at the upcoming AGM, Kerry Co-op will have two windows every year going forward in May and November when the share redemption scheme will be open.

Comment: shares scheme creates more tax anomalies than it does solutions
Is the proposed cash for shares scheme at Kerry co-op really the best option for shareholders, writes Lorcan Allen.

Shareholders in Kerry Co-op are faced with a critical decision at the co-op’s AGM in June. After a number of years of uncertainty with Revenue watching developments very closely, the board of Kerry Co-op has brought forward this proposed share redemption scheme in a bid to create liquidity in the co-op’s shares.

As Declan McEvoy notes on P26, this scheme will suit some shareholders, particularly those on low incomes who are paying the lower rate of income tax.

Shareholders need to ask hard questions of the board of Kerry Co-op about this new scheme

However, in the main, this scheme would appear to be extremely inefficient from a tax perspective for many shareholders and has the potential to have a major impact on farmers’ livelihoods in the years ahead.

Shareholders need to ask hard questions of the board of Kerry Co-op about this new scheme. Is the income tax liability created by this scheme really the most tax-efficient way forward? Many shareholders who may be interested in selling their Kerry Co-op shares will be hit with the higher rate of income tax at 52%, which is punishing to say the least.

Did the board of Kerry Co-op explore enough options around creating a liquidity mechanism that would result in a CGT event for shareholders, which would have meant a flat rate of tax at 33% for all shareholders? And what parameters did Kerry Co-op give independent tax advisers to explore options around a liquidity event?

Tax liability

On top of this, any shareholder who bought their shares on the grey market, or who inherited shares and has paid inheritance/gift tax at 33%, will not be able to deduct this cost from their income tax liability.

However, the biggest issue with this share redemption scheme is the potential impact and unintended consequences it could have further down the line.

Firstly, if this scheme is passed and shares are cashed in at a market value of €600 or higher, this will establish a definitive market value for a Kerry Co-op share.

If a new market rate is established, all future tax calculations by Revenue are likely to be on the much higher valuation of €600/share or higher

Up to now, Kerry Co-op shares had an arbitrary value set on the grey market at around €300/share, which has been used by Revenue for calculating inheritance tax, CGT and stamp duty bills.

If a new market rate is established, all future tax calculations by Revenue are likely to be on the much higher valuation of €600/share or higher.

Additionally, any person who inherits Kerry Co-op shares in the future would have to pay 33% inheritance tax upon receiving the shares and could also be hit with up to 52% income tax rate when they go to sell them, meaning an effective tax rate of up to 85%.

And secondly, because redeeming shares for cash under this scheme is deemed to be an income tax event by Revenue, it could have major implications further down the line for Kerry farmers in terms of social welfare payments or the state pension.

The Irish Farmers Journal understands that the Department of Social Protection currently values shares in Kerry Co-op at just €32/share when means-testing individuals for payments such as farm assist or the Fair Deal scheme. If a market value of €600 or higher is created, this would force the Department of Social Protection to value all Kerry co-op shares almost 20 times higher. Additionally, selling co-op shares could also impact the qualifying threshold for agricultural relief.

At the AGM in June, shareholders in Kerry Co-op will decide if this scheme lives or dies

When taken as a whole, this proposed share redemption scheme would appear to create more tax anomalies for shareholders than it does solutions.

Would a scheme that creates a CGT event for shareholders be the most tax efficient for the majority of shareholders? It would also have no impact on income calculations.

At the AGM in June, shareholders in Kerry Co-op will decide if this scheme lives or dies. It’s a crucial decision for these shareholders and one that must be weighed up carefully, particularly given the future implications it could create. The key question is whether this proposed scheme really is the most tax-efficient method for creating liquidity in Kerry Co-op shares.

Further analysis next week.