Farm Ireland
Independent.ie

Tuesday 21 November 2017

Farmers coy on Glanbia's 'complex' Dairy Ireland proposals

The Glanbia Ireland joint venture will be an enterprise of scale, with a 2.4 billion litre milk pool, revenue of €1.5 billion, 11 processing plants and over 1,800 employees.
The Glanbia Ireland joint venture will be an enterprise of scale, with a 2.4 billion litre milk pool, revenue of €1.5 billion, 11 processing plants and over 1,800 employees.
Ciaran Moran

Ciaran Moran

Key dairy farmers groups are reserving judgement on the announcement today that Glanbia Co-op is to pay €112 million to acquire a 60pc shareholding in the Glanbia plc’s Dairy Ireland division.

Commenting on the announcement, ICMSA President, John Comer, said that the Glanbia organisations will have to convince farmers that there will be a financial benefit to them as a result of this revised structure.

He also stressed that farmers’ attention will  focus primarily on whether they are likely to receive a stronger milk priceand farm inputs at competitive rates arising out of this move.  

“ICMSA will consult with its members and officers in the Glanbia region and, depending on their reaction and what we view as being in the interests of farmer-suppliers, we will then take a position regarding the proposal,” he said.

Meanwhile, IFA President, Joe Healy welcomed the commitment made by Glanbia to supporting farmer members in the proposal.

On the creation of a €40m Member Support Fund, Mr Healy said, while such a fund would hopefully not be required for quite some time, it is a matter of fact that dairy markets and prices have become extremely volatile. 

He added it was crucial that the new Joint Venture would pay a commercially competitive base price at all times.

Healy said the proposals had both positive and some more challenging aspects.

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He urged all Glanbia Co-op shareholders to inform themselves fully on this initiative at forthcoming Glanbia information meetings in advance of the required shareholder vote later this year. 

Healy added that IFA would engage further with Glanbia to fully assess the complex proposals over the coming weeks.

The Glanbia Ireland joint venture will be an enterprise of scale, with a 2.4 billion litre milk pool, revenue of €1.5 billion, 11 processing plants and over 1,800 employees.

Glanbia Co-op has also announced proposals to distribute by way of “Spin-out” 5.9 million shares in Glanbia plc to all members of the Co-op and to create a €40 million Member Support Fund.  The value of the share “Spin-out” is an estimated €100 million based on the Glanbia plc closing share price of €17.13 on Friday 17th February 2017.

This is worth €6,637 for a member with the average shareholding while for active dairy farmer members, the average value of the spin-out would be €10,791. 


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