Kerry explains its 'leading price' claim
Published 09/08/2011 | 05:00
Kerry Group has committed to paying "the leading" milk price on the Irish market.
The company claimed the price would be based on comparable milk solids and milk quality standards to those of other "major" Irish processors.
The commitment comes ahead of a second crucial vote by A-grade Kerry Co-op shareholders, which is scheduled for next week.
The ballot, if supported by the required 75pc of voters, would allow for the co-op's shareholding in the plc to drop below the existing 20pc threshold and would set a new threshold of 10pc plus one share. Guarantees on future milk prices emerged as an issue at the first shareholder meeting and ballot two weeks ago.
On that occasion, Kerry boss Stan McCarthy agreed to clarify a statement that the company would pay what he then described as "a leading" milk price.
A spokesman for Kerry Group said the latest commitment given by the company applied to its current milk production model, which was mainly grass-based. He also confirmed that the details of the package would be included in the supplier contracts that have been negotiated between the company and farmer representatives.
However, he declined to explain what was meant by the qualifying term "major" Irish milk processors, saying that this had yet to be defined.
Some Kerry suppliers expressed disappointment that the proposed milk price agreement wasn't based directly on world market prices for a basket of dairy products or on the price paid by the leading players on the European dairy scene such as Friesland Campina or Arla.