No one dares argue with Glanbia
Farmer organisations have reacted positively to the proposal by Glanbia Co-op to invest in a major milk processing joint venture.
IFA president John Bryan said the Glanbia proposals represent significant progress towards sustainably returning dairy processing back to farmer control.
He said, on initial examination, they went a long way towards minimising farmers’ concerns, including the debt load of the proposed joint venture.
He welcomed the extended period for discussion among shareholders, and said IFA will use the time to get into the proposals in detail and consult widely with members who are affected.
IFA will also seek independent advice.
"The proposal to reduce the co-op shareholding in the Plc below 50% is a preferable approach to the alternative of high debt levels which could leave the new entity having to dispose of co-op assets at a later stage in less favourable circumstances.
Also, it is critically important that all co-op shareholders can benefit.
The spin out of €120m-plus worth of shares gives farmers the option to hold the shares or sell them to help with expansion, or other financial needs."
He said the proposed joint venture must leave the door open for greater integration and co-operation in the dairy sector.
"This proposal must be used to further progress detailed discussions on collaboration with neighbouring processor Dairygold, and facilitate greater levels of constructive co-operation between those two processors and also with the smaller societies."!
IFA national dairy committee chairman Kevin Kiersey said there are many issues on which IFA will seek clarification — such as future merchant credit from the trading division, milk price volatility, and repayment of the revolving funds.
* ICOS president Bertie O’Leary said that making the Irish-owned milk processing operations of Glanbia more co-op orientated should enhance the possibility of greater levels of strategic collaboration between the new entity and other co-ops, which he said is vital in the context of post quota expansion.