Glanbia Ingredients Ireland Limited (GIIL) have today confirmed that 93% of its milk suppliers have signed-up to its new Milk Supply Agreement (MSA).
Commenting on the overwhelming response to the MSA, GIIL Chairman Liam Herlihy said the MSA will form the basis of a long term, sustainable partnership into the post quota era.
“I am pleased and encouraged by the very positive response to the MSA. This very high level of sign-up sends a strong signal to the market where our customers can see first-hand that GIIL has a loyal and committed supply base. In a post quota environment, where milk volumes are anticipated to expand rapidly, it is in the interest of all stakeholders that we have as much certainty as possible for our global customers in terms of the volumes of milk produced on farms, as well as how it will be assembled, processed, marketed and sold,” Mr Herlihy said.
He added: “The significant response to the MSA copper fastens the strong tradition of loyalty and partnership between GIIL and its milk suppliers. Our suppliers recognise the strength of GIIL and its two strong parents in Glanbia Co-op and Glanbia plc.
The duration of the MSA is to be five years, comprising an initial three year contract period running from January 2015 to December 2017. For any supplier wishing to cease supplying milk to GIIL they must adhere to a two year notice period from January 2018.
Mr Herlihy pointed out that underpinning the MSA is the philosophy of rewarding supplier loyalty and in this spirit, GIIL will now pay out a €2.5 m loyalty fund to all those who signed up to the MSA. The fund which is based on milk volume supplied in 2013, will equate to approx. 1cpl on June milk supply. This loyalty payment will be paid in July.
Meanwhile, GIIL is pleased to confirm that it will hold its milk price for June at 37cpl.