Farm Ireland
Independent.ie

Wednesday 17 January 2018

Wexford Creamery sale to Glanbia given green light

The Wexford Creamery plant at Rocklands.
The Wexford Creamery plant at Rocklands.
Declan O'Brien

Declan O'Brien

The controversial sale of Wexford Creamery to Glanbia Ingredients Ireland Limited (GIIL) has been given the green light by the Competition Authority.

The deal, which sparked a major row between different factions of Wexford suppliers, will now be finalised by the parties over the coming weeks.

The authority's decision has been welcomed by both Wexford Milk Producers Co-op, who own 70pc of Wexford Creameries, and GIIL.

Marty Murphy, chairman of WMP, said the decision meant the co-op could now proceed to complete the transaction.

Jim Bergin of GIIL said the Competition Authority decision would allow the company to actively engage with Wexford suppliers and management and staff of Wexford Creamery, with the aim of finalising all aspects of the purchase as soon as possible.

Agreement

"The agreement with WMP represents a significant development in the consolidation of the dairy industry in the southeast and gives long-term security to milk suppliers and to the Wexford milk processing plant," Mr Bergin said.

The Competition Authority's move follows a decision earlier this year to launch a full inquiry into the proposed acquisition.

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Under the terms of the purchase plan, WMP will acquire the remaining 30pc shareholding in Wexford Creamery, from British company Dairy Crest, for €3m.

GIIL will then pay €20m for the entire shareholding in the company.

The deal received the backing of 57pc of WMP's 326 shareholders in early December.

However, the decision to sell to GIIL proved extremely divisive and has led to close to 50 suppliers transferring their supply to Strathroy Dairies.

Despite the controversy it provoked, Marty Murphy insisted that the GIIL purchase of Wexford Creameries was a good deal for WMP's shareholders.

Investment

"The GIIL deal brings the investment and scale to Wexford Creamery that is necessary and that would not have been possible for us on a stand-alone basis.

"Very importantly, our own society (WMP) will continue as an active co-op and will be there to represent members and their interests for many years, as we move into the post quota era and the opportunity for milk expansion which this will involve," Mr Murphy said.

The deal will give GIIL access to another 90m litres of milk, depending on how much goes to Strathroy, and 200m litres of processing capacity.

Meanwhile, the ICMSA welcomed news that all the Irish processors audited by the Chinese authorities had met the standard required for exports to the Asian country.

The association's deputy president Pat McCormack said that the clearance received by the Irish dairy sector was further evidence of the world-beating levels of technical excellence now routine within Irish farming and processing sectors.

Indo Farming