Farm Ireland
Independent.ie

Monday 18 December 2017

Arrabawn ups the ante in milk battle

Arrabawn has announced a raft of new measures.
Arrabawn has announced a raft of new measures.

Arrabawn has announced a raft of new measures for members as the battle for milk suppliers across the south hits fever pitch.

In a letter to suppliers, Arrabawn Co-op chairman, Sean Monahan, said the dairy would:

* Allow anyone with a superlevy liability spread half of the fine over the next 12 months;

* Remove the charge for milk collection from April 1 this year;

* Introduce a bonus scheme for manufacturing milk supplies in December, January and February;

* Realign its liquid milk contracts;

* Introduce a bonus for new low cell count milk;

* Put a resolution to the co-op AGM to issue bonus shares for suppliers at the rate of one share per 1,000 litres delivered in 2015;

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* Not enforce penalties in 2015 for breaches of the milk predicted volume;

* Amend its preferred level of shareholding from 2.5c/l to 1.5c/l.

There has been a very public battle for milk in north Tipperary, with Dairygold and Glanbia accused of trying to poach Arrabawn suppliers.

Up to 20 suppliers are reported to be planning a move to Dairygold, with others opting to join Glanbia.

However, Arrabawn has pointed out to its members that it has consistently paid a higher price for milk than Dairygold or Glanbia over the last 12 months.

The Nenagh-based dairy claimed the availability of natural gas would further improve the efficiency of its processing plant and deliver a further price lift for farmers.

Merger

Mr Monahan also rejected suggestions that Arrabawn had not given sufficient attention to a merger offer from Dairygold last year.

He said the proposal had been assessed by a "top six accountancy firm" but the recommendation was that the "offer did not reflect the true value of the Arrabawn business" and was rejected.

Mr Monahan insisted Arrabawn was in a very good commercial position and would continued to be able to pay a competitive milk price, while at the same time increasing profit levels.

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