A leading farmer representative has questioned why food giant Glanbia has not paid a stronger price to its 4,400 Irish milk suppliers given the savings the group made out of its Luxembourg tax ventures.
Details of the dairy group's Luxembourg tax structure were revealed by the International Consortium of Investigative Journalists. Glanbia has funnelled as much as €1bn through the duchy to lower its tax bill.
Pat McCormack, deputy president of the Irish Creamery Milk Suppliers Association (ICMSA), accused Glanbia of leading the downward pressure on milk price this year, despite the bonanza its tax efforts had yielded.
"Given that Glanbia have availed of these tax measures, farmers would expect that they would be in a strong position to pay a market-leading milk price. It is very disappointing that they have led milk price down in recent months at a time of significant pressures on farmers," Mr McCormack said.
Glanbia has slashed returns to its dairy farmers since May, reducing the base price paid for milk from 39c per litre to 30.5c. Dairy farmer incomes have taken a massive hit as a result.
The Kilkenny company is Ireland's largest dairy firm, processing close to 1.6 billion litres of milk a year.
Dairy processors have blamed the recent price cuts on the downturn in global markets.
"One would have to ask if governments can facilitate large multinationals to minimise their tax bills, why can't they introduce simple measures to assist farmers deal with volatility," said Mr McCormack.
A spokeswoman for Glanbia said the group's Irish dairy processing arm was not involved in the transfer of funds through Luxembourg. She said Glanbia's actions were entirely legal. The IFA declined to comment.