Friday 28 November 2014

Kerry suppliers anger over price promise

Declan O'Brien

Published 07/11/2012 | 06:00

There is growing anger among Kerry Group milk suppliers over the continuing delay in securing an agreement on how the company will deliver on its commitment to pay the country's "leading milk price".

Kerry Group made the commitment in August 2010 ahead of a crucial vote by Kerry Co-op shareholders that allowed its stake in the plc to drop below 20pc. Kerry Group agreed at that time to pay the highest Irish milk price on a "like-for-like" basis in terms of milk quality and constituents.

However, negotiations on the detail of the agreement have been extremely slow, leading suppliers to accuse the company of dragging its heels on its implementation.

It has been suggested that a management call for product mix to be included in the calculation of the "like-for-like" price has delayed negotiations.

This is said to be driven by Kerry Group's failure to match the price paid by West Cork co-ops through much of the year and the sensitivity of the company's bosses on the issue.

Kerry Group and the West Cork co-ops are currently on the same base price of 31c/l, but Kerry lagged behind its southern neighbours through the spring and summer.

One Kerry supplier, who did not wish to be named, said farmers had delivered on their side of the bargain when they voted to allow the co-op's shareholding to drop below the 20pc threshold. "All we are asking for now is for the company to deliver on its commitment and pay what they said they'd pay and that's the country's leading milk price," he said.

A spokesman for Kerry Group said the company would have preferred an agreement to have been "signed off on earlier", but added negotiations had been "complex".

He said the leading milk price definition had been "broad" and that the detail of that definition had to be agreed.

He refused to set a timeframe on the conclusion of the talks, except to say they would be concluded "as soon as possible".

He also declined to comment on the possibility of a 13th payment being made by Kerry Group before the end of the quota year. The milk price issue was raised at a number of local meetings held between management and suppliers.

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