Grennans top Glanbia in fixed-milk price battle
Feed merchant reports farmer interest in its ‘loyalty scheme’
FEED merchants Grennans has stated there is interest in its fixed-milk price scheme as it counteracted the move by Glanbia to link feed purchases to a €30/t ‘loyalty scheme’.
The move by milk processor Glanbia has drawn the ire of feed merchants around the country.
Grennans has responded by topping Glanbia’s offer of 31c/l. It is offering a five-year fixed 31.5c/l base milk price — including VAT, on 3.3pc protein and 3.6pc butterfat —to its customers who are Glanbia suppliers.
John Grennan claimed Glanbia is using co-op shareholder funds to create a “war chest” for Glanbia Ireland to get cheaper milk and try undercut feed merchants on the value they are offering.
“Without the top up from the shareholder funds, their price is very weak on milk,” he said.
The milk will still be supplied to Glanbia, but Grennans is pledging that if the average base price paid for milk by Glanbia over the five-year term dips below the fixed price, it will pay the difference for the volume fixed.
However, farmers will be required to pay the feed merchant the difference if it surpassed the fixed price.
Grennans said there will be “limited quantities” and it will apply to a maximum of 20pc of a customers annual milk output.