Supply boost sees Glanbia pay €1bn for milk in 2018
Glanbia Ireland said today that it paid approximately €1 billion, including VAT, for milk directly to 4,500 farmer suppliers in 2018.
CEO of Glanbia Ireland, Jim Bergin, told its AGM today that this delivered a direct boost to the economies of towns and villages in rural Ireland, with payments worth €168m to suppliers in Co Kilkenny, €149m in Co Waterford, €124m in Co Tipperary and €122m in Co Wexford.
“The 5.1pc growth in milk supply in 2018 was worth over €47m extra in payments last year which has an impact on the economies of rural Ireland and our suppliers’ farms,” he said.
Milk supplies to Glanbia Ireland are now at 2.7 billion litres per year, with supply reaching 88 million litres per week at peak this year, compared to around 45 million per week in 2014.
In line with the growth in milk volume, Glanbia has invested €343 million in processing capacity, including investments in the Belview milk powder plant and in cheese processing in Wexford.
Glanbia Co-op said its members benefited from a strong dividend last year, with a total of €14.8m paid out to Members (39 cent per share). This included an Ordinary Dividend of 13c, plus a Special Dividend of 26c as approved by Members their 2017 Special General Meeting in Punchestown.
The AGM approved Share Interest (Dividend) of 15 cent per share for 2019, which is 15pc higher than the previous year.
At a Special General Meeting post the AGM, Members approved the creation of a €30 million Support Fund and the distribution of 13.5 cent per share (c.€5 million) in Share Interest (Special Dividend) to be paid no later than 30 December 2020.
Glanbia has come under fire from farm organisations in recent months over cuts to its milk price.
IFA National Dairy Committee Chairman Tom Phelan said this month that a huge level of anger was building up among Glanbia suppliers over milk price. He said Glanbia was the only milk purchaser to have cut their pay-out to farmers in both February and March, and was firmly last in the March league.
He said feedback from Glanbia farmer meetings and conversations with numerous suppliers clearly show just how dangerously out of touch Glanbia have become as to how important a benchmark milk price is to farmers.
“Glanbia rightly pride themselves in being a leading player in the dairy industry. But farmers supplying Glanbia legitimately expect them to be a leading payer, too. And in this respect, all the farmers I speak to at the moment are bitterly disappointed with the poor Glanbia milk price performance,” Mr Phelan said.
“As a processor of milk, Glanbia Ingredients Ireland takes a margin of 3.2% after tax, the highest in the industry, which has been agreed with farmers to satisfy their lending commitments to fund expansion investment,” he said.
“Glanbia is a complex structure made up of many parts. It is well resourced, as shown by its ability to pay a €14m trading bonus to farmers earlier this spring,” he said.
“However, Glanbia must realise that ultimately, farmers will judge them on the milk price they pay every month. They must convince farmers that their ambition is not just to be a leading player, but also a leading payer,” he said.
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