Dairygold has received milk supplier agreement “termination notices” from a number of suppliers over apparent concerns about changes to the co-op’s loyalty reward scheme.
The Dairygold Loyalty Reward Scheme is aimed at rewarding milk suppliers who also trade with Dairygold’s agri-business.
In a recent letter to the members of the Dairygold committee, the business said that recent changes to the Dairygold Loyalty Reward Scheme were implemented to “increase the rewards paid to those who are actively trading with the society and do so in a fair and equitable manner.
Dairygold said that there were four “main changes” as part of the updated scheme:
- Reducing the number of tiers in the scheme;
- Adjusting the cash value of each tier;
- Give new entrants two bonus shares for every €300 spent in the first five years;
- Link any potential year-end bonuses or feed rebates to the level of purchases during the year.
However, it appears that these changes have angered some suppliers.
Dairygold said: “While the majority of Dairygold members have reacted positively to the proposed changes, we are aware of concerns expressed by a number of milk suppliers.”
The business confirmed that it has received milk supplier agreement termination notices from a number of members of purchasing groups. Dairygold said it is its intention to engage with these milk suppliers directly over the coming days.
Under the scheme, a threshold of 6c/L worth of trade with Dairygold agri-business will now apply, which suppliers will have to reach to get the full amount of a year-end bonus, if one applies in a given year.
Dairygold said that year-end top-ups are “occasional and not guaranteed”.
“They were only paid in three of the last 10 years and any top-ups are dependent on the society’s overall business performance, which includes profits generated from the agri-business,” the business said.
Dairygold also said that it is “committed to maximising its monthly milk price” rather than “managing” the monthly price and then paying top-ups at year-end.
“In the event that the board decides to issue a year-end milk price top-up, for 2025 milk supply onwards, all milk suppliers will be eligible for a minimum of 50% of any such payment, regardless of their level of trade with the co-op,” committee members were told.
“A milk supplier who has a level of trade in excess of 6c/L will receive the full payment, to reward their loyalty.”
The communication to committee members said that all purchases made by a supplier, either individually or as part of a group account, will count toward the 6c/L threshold.
Dairygold also said that it does not intend to increase this threshold.