1.75c/L payment for 2017 offered to Kerry suppliers to resolve dispute

A payment of 1.75c/L for 2017 supplies has been offered by Kerry Group to suppliers through Kerry Co-op in order to resolve a long-running issue.

It is hoped that this offer will put the ‘13th payment‘ issue – which has been ongoing since 2015 – to bed.

Under a milk supply contract signed by suppliers, Kerry committed to paying a leading milk price on a ‘like-for-like basis’. As a result of this, ’13th payments’ had to be issued in order to comply with the agreement.

However, a dispute arose in 2015 over the ’13th payment’ made to suppliers – because of this dispute, an arbitration case ensued.

In effort to resolve this dispute, a payment of 1.75c/L for 2017 supplies was offered to suppliers late last week, a spokesperson for Kerry Group confirmed.

This offer is currently being examined and discussed at farm level. If an agreement is reached, the arbitration case will be required to be withdrawn.

Over the past few months, strong discussions have taken place in order to restore the good relations between Kerry Group and its suppliers, the spokesperson added.

A payment of 1.75c/L on 2017 deliveries of 1.2 billion litres from Kerry’s 3,200 suppliers would equate to a payment of €21 million.

Kerry Group is hopeful that the issue can be resolved and that the offer will be accepted as soon as possible. Plans would be put in motion to issue this 1.75c/L payment once an agreement has been reached between Kerry Group and the suppliers.

Earlier this morning, Kerry decided to hold its milk price for the second consecutive month. Its suppliers will receive a base price of 36c/L including VAT for October milk.

Kerry suppliers were made aware of the decision recently. Last month’s announcement that the processor would hold its milk price for September supplies brought to an end four months of consecutive increases.

Agreement reached in pay dispute

Earlier this month, it was also confirmed that an agreement had been reached over a pay dispute between Kerry Group and 290 workers at its Listowel plant.

The dispute was settled on Friday, November 3, after workers and management came to an agreement – following a series of 24-hour strikes since the end of September.

On September 26, approximately 290 workers took part in the first 24-hour work stoppage at the dairy processing plant.

The workers – who were represented by SIPTU – were originally demanding a total pay increase of 14% over the next four years, or 3.5% per annum.

After the case was looked into by the Workplace Relations Commission (WRC) and the Labour Court, it was recommended that workers receive an annual 2.5% pay hike over the next four years. This would equate to a jump in pay of 10%.

Kerry Group accepted this recommendation, but it was rejected by the workers.

Following discussions between management and workers, it is understood that an agreement was reached in relation to: pay up until mid-2020; the implementation of SAP IT technology; as well as operational procedures on-site.