Glanbia has argued that its procedure for allocating volume in its new reserve pool for suppliers was a “very thorough process”, despite some suppliers receiving less of an allocation than they had expected.
A spokesperson for Glanbia told Agriland that the allocation numbers had been adjusted to take account of predicted cow numbers and, as a result, some suppliers were allocated volumes that were less than they had applied for.
The spokesperson asserted that the majority of suppliers “were reasonably happy” and that Glanbia is committed to working with the suppliers who feel they were shortchanged.
Affected suppliers are asked to contact their local farm development manager, and Glanbia will look at each individual case to determine if the current allocation is correct, the spokesperson said.
1,727 suppliers received notification of their allocation to the reserve pool this week, accounting for 89% of applicants.
The pool was established as part of Glanbia’s peak supply control measure that was announced earlier this year, triggered to a large degree by ongoing legal action against its planned cheese manufacturing plant in Belview, Co. Kilkenny taken by An Taisce.
While suppliers will have to control increases in milk production during peak for 2022 and 2023, the reserve pool has been set up to cater for suppliers who will be negatively financially impacted by having to do this.
Suppliers who successfully apply for the reserve pool are allocated additional peak volumes for exceptional cases where a farm will be financially impacted by the requirement to tighten control on milk supply; for example, in a situation where there has been a notifiable disease outbreak.
The allocation process was overseen by international professional services firm PwC. The applicants to the reserve pool account for 37% of Glanbia’s supply base and 47% of its milk pool.
Now that the allocations have been complete, Glanbia said this week that there is no additional capacity now available over peak – meaning there is no guarantee the volumes in excess of peak allocations will be able to be processed.