Farm Ireland

Thursday 23 November 2017

Connacht gold for Tullamore?

Darragh McCullough

Darragh McCullough

Talks are believed to be at an advanced stage as Connacht Gold attempts to buy one of the country's smallest milk processors, Tullamore Dairies.

Tullamore have grown their market share through aggressive discounting of their milk sales in recent years. This has seen their total volume sales grow by nearly 30pc in the last year alone, when they supplied just over 620,000 litres of milk into shops.

The business is operated by the Clearys, who are related to the other Cleary family behind the hugely successful Glenisk brand of organic yogurts and milk.

The business is seen as a good fit for Connacht Gold, who have also been growing their market share of retail milk sales since they secured a large contract with Tesco. Connacht Gold's appetite for a deal has also been whetted after they were reportedly twice outbid in recent times on the sale of Kerry's midlands and Limerick milk businesses to Arrabawn and Glanbia.

However, it is believed that an agreement may not be reached for some weeks. It is unclear what the sale price is likely to be. Tullamore Dairies recently lost a court case taken against them by the National Milk Agency.

The dairy incurred costs of tens of thousands when the court found it had failed to produce all the required information on the sources of its contracted milk supplies.

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