Glanbia under fire over cut to base milk price
Farm leaders claim global trends support holding prices at October levels
The ICMSA has accused Glanbia of paying its milk suppliers a top-up "with their own money" after Glanbia Co-op announced it was supporting November milk prices by 2c/l.
Glanbia Ireland reduced its base price for November milk supplies by 2c/l to 30c/l (including VAT), but a support payment of 2c/l from Glanbia Co-op means that returns to suppliers remain unchanged at 32c/l.
However, the ICMSA has slated the move and questioned Glanbia Ireland's motivation for cutting its base price.
"I have no idea why Glanbia indulge in this practice of cutting base price and then returning it as 'top-ups', as if it was somehow out of the goodness of their hearts," said ICMSA dairy chairman Gerald Quain.
"Glanbia suppliers have indicated to us repeatedly that they don't want to be recipients of charity or to be paid 'top-ups' with their own money out of the co-op," Mr Quain said.
The ICMSA representative maintained that suppliers wanted a fair return for their milk based on what their processor received from the market. Mr Quain said that the indicative price level for such a payment was the Ornua index.
"If Glanbia want to pay a bonus or discretionary payment then they should pay it on top of the minimum market price, and that is the Ornua PPI. Cutting the base and then adding it back as a discretionary payment doesn't fool anyone - certainly not their suppliers," said Mr Quain.
Describing as "embarrassing" the failure of the country's largest processor to match Ornua's PPI index, he said the base-price cut could not be justified by recent market trends.