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Glanbia denies GIIL or Co-op involved in Luxembourg tax deal

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ICMSA's Pat McCormack

ICMSA's Pat McCormack

ICMSA's Pat McCormack

Glanbia Ingredients Ireland Limited (GIIL) and Glanbia Co-op were not involved in the massive transfer of funds through Glanbia group's Luxembourg subsidiaries, a spokeswoman for the company said.

Last week it was revealed Glanbia funnelled funds totalling close to €1bn through subsidiaries in the duchy in order to reduce its tax bill.

A Glanbia spokeswoman insisted neither GIIL nor Glanbia Co-op were involved in its Luxembourg tax arrangements. She also pointed out that Glanbia's actions were entirely legal. However, the ICMSA has questioned why 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.

ICMSA deputy president Pat McCormack 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 they would be in a strong position to pay a market-leading milk price and thus, it is very disappointing that they have led milk price down in recent months at a time of significant pressures on farmers," said Mr McCormack.

He pointed out that GIIL had cut its milk price by close to 20pc since May, reducing the base price from 39c per litre to 30.5c per litre.

Downturn

Dairy processors have blamed the recent price cuts on the downturn in global markets, but Mr McCormack questioned why so much effort is placed by companies on minimising their tax exposure, with less of an effort made to tackle market volatility.

"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 like the Farm Management Deposit Scheme proposed by ICMSA which would cost substantially less than the tax reliefs available to multinationals," Mr McCormack added.

ICSA president Patrick Kent said Glanbia's actions highlighted the need for greater transparency on profitability in the retail chain.

"It again highlights the need for regulation to shine a light on who gets what from the retail chain," said Mr. Kent.

"We need transparency to see who makes profits and who adds what value to retail products which are based on meat, dairy and grain produced by Irish and other European farmers."

The IFA declined to comment on Glanbia's actions.

Meanwhile, Enterprise Ireland confirmed that GIIL, which is 40pc owned by Glanbia plc, had received €4.64m in grants from the State body over the last five years.

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