Farm Ireland

Wednesday 21 March 2018

Glanbia embroiled in quota inquiry

Shareholders gathered at the shareholders vote at the Glanbia special meeting in Gowran Park Kilkenny last October. A special general meeting of Glanbia Co-Op is due to be held in February.
Shareholders gathered at the shareholders vote at the Glanbia special meeting in Gowran Park Kilkenny last October. A special general meeting of Glanbia Co-Op is due to be held in February.
Declan O'Brien

Declan O'Brien

Glanbia was left red-faced this week with the news that one of their leading suppliers is under investigation for the illegal movement of milk.

Department of Agriculture personnel are looking into allegations that a well-known Tipperary-based supplier shifted up to 500,000 litres of milk from one of his farming operations onto another holding over the last 10 months.

As the country heads for an over-supply situation of more than 100m litres for the 2013-2014 supply period, the temptation on farmers to avoid some or all of the €30m-plus fine is growing with every passing month.

The biggest pressure is in the Dairygold and Glanbia milk pool areas, where quota has traditionally been in short supply.

Department officials contacted Glanbia last Thursday about the allegations, and the board of Glanbia Ingredients Ireland (GII) was informed immediately, according to a company spokesperson.

She declined to divulge any further details on the case other than to state that "GII is facilitating inquiries by the Department into milk quota arrangements involving two of its milk suppliers in the current quota year.

"GII implements procedures for milk quota arrangements in line with Department of Agriculture guidelines.

"Pending conclusion of the Department's inquiries, GII cannot comment further."

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A statement from the Department said that "any abuse of the milk quota legislation is taken very seriously by the Department of Agriculture.

"The Department is aware of allegations relating to possible infringements of the milk quota legislation and is currently thoroughly investigating the matter."

Department investigators have already interviewed senior Glanbia officials and visited the company's headquarters at Ballyragget to examine paper trails relating to the implementation of quota accounting systems.

Moving 500,000 litres of milk to a supplier with spare capacity could turn a €142,500 superlevy bill into milk sales worth over €200,000.

Meanwhile, a Special General Meeting (SGM) of Glanbia co-op is due to take place on February 7, when members will hear two proposals.

The first will be a proposed €10/t bonus for farmers who purchased fertiliser through the co-op last year.

The second will be a proposed rule change so that future board members' positions can be considered at least once during their normal three-year term.

Viewpoint - Declan O'Brien: GII's quota difficulties

News that Glanbia Ingredients Ireland Ltd is embroiled in an investigation relating to alleged milk quota infringements will come as a serious embarrassment for the milk processor.

Very few details were available on the inquiry as we were going to press and neither the milk processor not the Department of Agriculture were giving out too much information.

There are plenty of rumours doing the rounds – including one which suggests that the Tipperary supplier at the centre of the investigation is very well known within the co-op.

How the investigation plays out is anyone's guess, but the matter is certain to be raised by co-op shareholders at a series of Glanbia regional meetings which are scheduled to take place over the next few weeks.

With the country expected to face a superlevy fine in excess of €30m this year, the realisation of being seriously over quota is beginning to sink in with many farmers.

One Glanbia supplier I talked to yesterday said he was facing a fine of more than €20,000.

Bills of this magnitude tend to concentrate minds, and farmers will be very short on sympathy for any farmer who may have been flouting the quota rules in a blatant fashion.

That is not to say that this was happening in this case; or, indeed, that any wrong was being done. As already stated, we will have to wait for the full details for the case to emerge.

But the amount of coverage the incident has received highlights the level of nervousness in the industry regarding the quota fines.

And unfortunately, we are facing another year of these fines, as milk producers count the months down to the abolition of milk quotas on April 1 next year.

While the farm organisations have sought movement from the EU commission on the level of the fines imposed, no movement on this issue is expected from Brussels.

Having faced down significant opposition to remove milk quotas, the Commission does not want to re-open the debate so as to cut superlevy fines.


Away from strictly farming news, it is with regret that we say adieu to our colleague Caitriona Murphy this week. The fine lady from South Tipp is leaving the Farming Independent to join the Irish Field.

Having worked with Caitriona for close to a decade, I can honestly say that the Indo's loss will be the Field's gain.

The Farming Independent would like to wish Caitriona all the very best for the future and say many thanks for all the great work over the years.

Irish Independent

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