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Independent.ie

Saturday 10 December 2016

Pledge on milk price persuades Kerry voters

Declan O'Brien and Majella O'Sullivan

Published 26/07/2011 | 05:00

An assurance by Kerry Group boss Stan McCarthy on milk price and future processing rights was credited with assuaging supplier concerns ahead of last week's decision by Kerry Co-op shareholders to clear the way for a reduction in the co-op's stake in the Plc.

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Kerry Co-op milk suppliers have voted in favour of rule changes that allow the co-op's shareholding in Kerry Group Plc to drop below its current 20pc threshold.

The proposal, which has been accepted by 79.8pc of shareholders, allows for the establishment of a new threshold of 10pc plus one share.

Leading

In his presentation to suppliers before the key vote, Mr McCarthy confirmed that Kerry would pay a leading milk price "referenced to the price paid for comparable milk constituents by major Irish milk processors".

In a statement issued later, Mr McCarthy stated that by 'leading milk price' he meant a price based on dairy market performance, on a like-for-like basis for comparable milk constituents.

"Kerry would pay a milk price at least equivalent to that paid by other major Irish milk processors," he said.

Meanwhile, a spokesman for Kerry Group denied that the recent milk price hike by the processor was in any way influenced by last week's ballot.

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"Over recent months, and in discussions with milk suppliers, Kerry committed to review its milk price based on market returns. On that basis, on Monday, July 11, Kerry Group confirmed a 1c/l increase for June to 34c/l. We also confirmed that having secured our market position for the majority of this year's production, we also backdated the increase for milk supplied in April and May," Kerry Group stated.

Out of an eligible 4,400 'A' grade shareholders -- or active milk suppliers -- 1,638 turned up at the special general meeting at the Brandon Hotel in Tralee last Wednesday afternoon to cast their vote.

Ballot

A total of 1,629 people took part in the ballot and there were four spoiled votes. The motion was carried by 1,297 in favour with 328 against, which gave the co-op more than the 75pc it required to carry the proposal.

In order for the deal to go through, a second vote on the same issue is scheduled for Tuesday, August 16. This ballot must also be carried by at least 75pc of co-op shareholders.

In other Kerry news, the group has confirmed it is in exclusive talks to buy the flavours arm of US food giant Cargill.

The US firm has had discussions with its employees regarding the offer which, if successful, could help Kerry to expand its presence in the beverage market.

Although no official details have been released, it's estimated that the deal could be worth around €200m.

Cargill's consultation process is expected to be completed in the first half of September.

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