IFA accuses Glanbia of paying below market rate for milk

The IFA has severely criticised Glanbia’s decision to cut its base milk price this week accusing the co-op of ‘shortchanging’ its suppliers.

Commenting on the price cuts implemented by Lakeland and Glanbia GII on March milk, IFA National Dairy Chairman Sean O’Leary said the 1c/l Lakeland cut was undoubtedly disappointing.

However, the Glanbia cut left GII paying a price, at 22c/l including VAT before co-op and exceptional Ornua bonus top ups, 1.7c/l out of line with what they were receiving from Ornua for March based on the PPI, namely a farm milk price equivalent of 23.7c/l including VAT.

He said this short-changes their suppliers very severely, and added that the move strongly suggests that GII is seeking to keep the cost of milk well below that paid for by other co-ops.

“I have repeatedly said that it was unacceptable for co-ops to let farmers carry 100% of the market risk. I am very disappointed today that GII are doing just this – paying farmers the lowest possible base price while utilising the co-op’s resources – farmers’ own money – and the bonus received from Ornua to prop up the price,” he said.

“To say that Glanbia suppliers are angry is an understatement. I will be looking for a meeting with Glanbia at the earliest opportunity,” Sean O’Leary said.

Henry Corbally, Glanbia chairman, said that the Board and management of Glanbia is acutely conscious that the current weakness in dairy market returns, as well as the challenging weather, is extremely difficult for milk suppliers.

“Glanbia appreciates the income challenge and is doing all it can to support our farmer suppliers, particularly through Glanbia Co-operative Member Support payments, our Fixed Milk Price Schemes and the recently launched MilkFlex Fund,” he said.