It's decision time for Kerry
Published 09/08/2011 | 05:00
A new package on offer to milk suppliers from Kerry Group is again seeking to assuage supplier concerns ahead of the second crucial vote next week on reducing the Kerry Co-op shareholding in Kerry Group plc.
The vote by A-grade Kerry Co-op shareholders, which is mainly made up of current milk suppliers, takes place in the Brandon Hotel, Tralee, next Tuesday.
The proposal, if carried, would allow for the co-op's shareholding in the plc to drop below the existing 20pc threshold and would be set at a new level of 10pc plus one share.
While the proposal comfortably topped the 75pc acceptance level that was needed to get past its first vote by co-op shareholders, concerns were raised by suppliers regarding future milk prices.
The new offer by Kerry Group boss Stan McCarthy aims to deal with these concerns. It guarantees that Kerry will pay "the leading" milk price among "major" Irish dairies for comparable solids (fat and protein) and quality.
Kerry Group officials claim that this move delivers on an assurance given by Mr McCarthy, made before the first ballot, to put substance on an assurance that the company would pay a "leading" milk price.
Supporters of the current proposal also point to the fact that supplier contracts that have been agreed by Kerry mean dairy farmers have clearance to produce at least 20pc extra milk without any processing charges after 2015.