As voting day approaches for the restructure of Glanbia Co-op, the Irish Creamery Milk Suppliers’ Association (ICMSA) recommends a ‘yes’ vote that would bring Glanbia Ireland (GI) under farmer control.
A special general meeting (SGM) will take place on Friday, December 17 where more than 7,000 eligible Glanbia shareholders will vote on a proposed transaction that would see Glanbia Co-op purchase Glanbia plc’s 40% stake in Glanbia Ireland. A number of other resolutions will be voted on at the same meeting.
While there may well be uncertainty in some quarters, ICMSA president, Pat McCormack, has confirmed that the association recommends voting ‘yes’ to bringing GI under full farmer control.
He said the current proposal had sparked considerable debate around key issues like the funding of the plan, the commitments on milk price and the use of the investment fund.
Following numerous meetings with Glanbia Co-op, the ICMSA now believes that sufficient flexibilities are available to the co-op in terms of funding the proposal and taking account of stock-market developments, McCormack said.
He also stated that assurances have been received in relation to the use of the investment fund with the shares not being sold until a strong proposal is in place that will deliver better returns and, in turn, a better milk price for farmers.
McCormack reiterated ICMSA’s conviction that milk price is the key to farmers’ feelings and intentions on the matter.
Based on analysis available through the ICMSA milk tracker, Glanbia had underperformed in recent years and needs to move up the milk league and deliver a consistent strong milk price to its suppliers, he said.
He added that the proposal’s removal of the 3.2% guaranteed profit margin and the dividend payment to the plc presented a clear opportunity for the new entity to pay a stronger milk price.
In terms of co-op shareholding, the ICMSA welcomed the commitment that the position of milk suppliers will be considered with proposals in 2022 to improve their position from a shareholding perspective.
“While there is no definite commitment on milk price, placing the business in a co-op structure makes sense and farmers will have control. Glanbia board and management have given a clear commitment that they intend to perform strongly on milk price and the ICMSA believes that Glanbia shareholders should register to vote by the deadline and support this proposal on Friday.”