Kerry says it will match the top price

Declan O'Brien

Declan O'Brien

Kerry Group insisted that it had not broken a pledge to its suppliers to match the top milk price paid by the main players in the Irish dairy scene.

The decision by the four West Cork co-ops, which process their milk collectively through Carbery, to hold their milk price for April has left Kerry Group 3c/l below the 34c/l (including VAT) paid by its southern neighbours.

Rumblings of discontent were reported in the southwest, with Kerry milk suppliers expressing dissatisfaction over the company's decision to drop its milk price before Carbery had made a decision on what it was paying for April.

However, a Kerry Group spokesman said the company was standing by its commitment to match the leading milk price, but he maintained that this would be fulfilled on an annual and not a monthly basis.

"While milk price is reviewed on a monthly basis, our commitment to paying the best milk price on a like-for-like basis will be fulfiled on an annual basis," he said.

Asked if the company would pay a bonus at the end of the year to make up any shortfall that may arise through the year, the spokesman said that Kerry management would have to "work its way through this".

As part of the move last August to take the Kerry Co-op shareholding in Kerry Group plc below the former 20pc threshold, the company agreed to match the top milk price paid by what were described as 'major' processors.

Kerry Group maintain this agreement covered the price paid on a 'like-for-like basis' for comparable solids and milk quality standards.

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But some Kerry suppliers claim the commitment was based on an independently audited price comparison.

Kerry, Glanbia, Dairygold, Town of Monaghan, Centenary and Tipperary are all working off a base of 31c/l (including VAT) for April.

This is 3c/l below the base being paid by the four West Cork co-ops of Lisavaird, Drinagh, Bandon and Barryroe.

Meanwhile, the decision by Dairygold to cut its April milk price by 3c/l followed a marathon board meeting last Wednesday.

It is understood that Dairygold management pointed out at the meeting that funding milk price out of the co-op's reserves was not an option for the society, given the investment that would be required to expand its processing capacity post 2015.

However, the co-op announced a €15/t cut in fertiliser prices. A Dairygold spokesman said this was to assist its farmer members through "the difficult growing conditions currently being experienced".

He added that no decision was taken by the Dairygold board in relation to compound feed prices.

In other dairy news, Arrabawn has moved to a base of 30.45c/l (including VAT) for April supplies, Connacht Gold is on 30c/l (including VAT), while Lakeland Dairies is on 31.5c/l (including VAT).

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