Glanbia offers penalty-free exit clause in new fixed milk scheme
Farmers signing up to Glanbia’s new fixed milk and feed price scheme will be allowed opt out of the feed purchases after two years without penalty.
The alteration was made to the scheme amid concerns among farmers about tying into the new feed element of the scheme for the five year term.
It guarantees a fixed milk price of 31c/l including VAT and a €30/t loyalty bonus on all dairy feed purchased from Glanbia Ireland during the scheme.
Sean Molloy, director of strategy with Glanbia Ireland, said there was initially a lack of understanding of their objectives with the scheme.
“We decided as a statement of confidence by the organisation to say to farmers if at the end of two years it hasn’t delivered for you then without any questions asked you can step back from it,” he said, adding the change to the feed part had “made a huge impression”.
He said they intended to deliver on the scheme so no farmer would want to leave it.
Glanbia has stated that suppliers who commit to purchasing feed from the processor will be given priority access to the fixed milk price strand of the package. Mr Molloy said they wanted to encourage all of their members to be “loyal” to the organisation with 60pc of the business owned by farmers.