Farm Ireland

Monday 19 March 2018

Kerry Group in talks with Arrabawn on Dawn sale

Declan O'Brien

Declan O'Brien

Kerry Group is in negotiations with western milk processor Arrabawn concerning the possible sale of its liquid milk business in Galway.

A spokesman for Kerry would not comment but it is understood talks are ongoing between the milk processors regarding the purchase of the Dawn Dairies facility in Renmore, outside Galway city.

An Arrabawn official said the co-op was looking at a number of options and would not be drawn on the Dawn talks.

The Kerry subsidiary has three processing plants -- the others are in Limerick and Killarney -- but any deal with Arrabawn would be limited to the purchase of the Galway plant.

Close to 120 liquid milk producers supply the Renmore facility. These farms are mainly in the Loughrea and Athenry areas but there are also suppliers in north Galway and around Moate, Co Westmeath.

Arrabawn recently secured a deal with Aldi to supply milk to 10 of the discounter's outlets in the west.

The co-op's fresh milk business is based at Kilconnell, near Ballinasloe, Co Galway, and the processing of the Dawn Dairies supplies could be consolidated into that plant.

Kerry and Arrabawn already co-operate in terms of milk collection and processing, but a source close to the negotiations insisted that the parties were still a long way off concluding a deal.

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Meanwhile, it has emerged that Kerry Group's initial offer of close to €23m for the Newmarket Co-op has been rejected.

The offer was turned down by the 25-person Newmarket board last week, but further negotiations are now taking place.

Irish Independent