Farm Ireland
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Thursday 14 December 2017

New twist in battle for Wexford Creamery milk pool

Declan O'Brien

Declan O'Brien

The battle for Wexford Creamery's milk pool has intensified after clarification by Strathroy of the terms and conditions farmers would enjoy if they switched to the Northern dairy.

Strathroy directors Ruairi and Cormac Cunningham addressed a meeting of more than 150 Wexford Milk Producers (WMP) shareholders and Wexford Creamery suppliers on Friday evening in Taghmon, Co Wexford.

The Cunninghams insisted Strathroy was serious about buying the business, while also indicating that the dairy would take all the suppliers that were interested in moving to the Dungannon-based dairy.

They also set out the conditions which would apply to any purchase of Wexford Creamery by Strathroy. They guaranteed:

* To pay a minimum of the Glanbia price;

* No levies for processing facilities;

* No restriction on suppliers increasing production;

* No penalties for under or over production;

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* No long-term contracts;

* No penalties for suppliers wishing to cease supply;

* Spring milk producers will not be forced to supply winter milk.

It is understood that up to 40 Wexford Creamery suppliers indicated that they intend to move their supply to Strathroy.

Responding to the Strathroy offer, Marty Murphy, WMP chairman, said the co-op was fully committed and contracted to the WMP-Glanbia Ingredients Ireland (GII) agreed acquisition of Wexford Creamery as approved by a majority vote of shareholders at a special general meeting (SGM) last month.

"The deal agreed and approved by shareholders is a good deal for Wexford dairy farmers and it secures the long-term sustainable wellbeing for milk production in Wexford," said Mr Murphy.

CONFUSION

Acknowledging that Strathroy intervention had "caused confusion'', Mr Murphy said he had written to the company before Christmas seeking clarification of their proposal.

However, Mr Murphy said no offer or proposal has been communicated to the board of WMP, a point disputed by Ruairi Cunningham of Strathroy.

Mr Murphy added the Strathroy intervention "had accelerated sign-up by shareholders to the milk supply contract" and over 50pc of the milk suppliers representing over 50pc of the milk pool had already signed.

Last month's SGM of WMP shareholders approved the sale of Wexford Creamery to GII. WMP held a 70pc shareholding in Wexford Creamery, with the remaining 30pc owned by British company Dairy Crest.

The €20m deal gave GII access to Wexford's 100m litres milk pool, as well as the company's processing facilities.

The deal includes GII making a €3.7m cash payment to WMP to fund the purchase of the Dairy Crest stake, and pay towards a dividend which could be worth up to €2.2m to WMP members.

The GII package has proven unpopular with a section of WMP shareholders, particularly in south Wexford, and they have been at the heart of recent efforts to oppose the deal.

Irish Independent