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Independent.ie

Tuesday 27 June 2017

Glanbia confirms Tullamore buyout

Declan O'Brien

Declan O'Brien

Glanbia has confirmed that it has bought the Tullamore Dairies liquid milk brand, but the sale price has not been disclosed.

Owned by the Cleary family, who are related to the Clearys behind the successful Glenisk brand of organic yoghurts and milk, Tullamore Dairies is one of the country's smallest milk processors.

However, the business has grown its market share in recent years via aggressive discounting of milk sales. This has seen its total volume sales grow by nearly 30pc in the past year alone, when it supplied just over 620,000 litres of milk into shops.

It is understood that the deal is confined to the sales book of the business, with contracted milk supplies remaining with Tullamore.

A statement from Glanbia described the purchase as a "bolt-on acquisition", which consolidated the company's position in the market.

Develop

"For Glanbia, this development expands the range of regional brands in our portfolio and will enable Glanbia Consumer Products to further develop its liquid milk business in the midlands region," the company stated.

"The Tullamore Dairies brand will complement our existing regional brand strategy, which has been successful in Dublin and Munster -- through the Premier, Snowcream, CMP, Golden Vale and Dawn (Limerick) brands," the statement added.

Tullamore Dairies has 14 employees and some will stay with the company, while others will transfer to Glanbia.

Connacht Gold had been touted as a potential buyer of Tullamore and talks between the two sides were reported to have been at an advanced stage earlier this year.

Meanwhile, there is continuing speculation that Connacht Gold is to buy Donegal Creameries' liquid milk business.

Despite both parties refusing to comment, industry sources claim that the deal is at a due diligence stage.

Donegal Creameries has a milk pool of close to 125m litres, one third of which is processed into fresh milk and yoghurts at its Killigordon site. The remainder is sold to other co-ops, including Connacht Gold, for processing.

While Donegal Creameries has grown its output of liquid milk massively since 2008, returns from the business have collapsed. Profits from the milk division fell from €2.1m in 2009 to just €20,000 last year.

Connacht Gold has been aggressively growing its market share of retail milk sales in recent years and a possible deal with Donegal would give the western co-op a commanding grip on the northwest of the country.

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