Kerry Group has been accused of being “a little cute” with their latest milk price announcement for July milk supplies, by the Irish Creamery Milk Suppliers’ Association (ICMSA).
Making the claim, ICMSA Dairy Committee chairman Ger Quain noted that, instead of increasing its base price to 36c/L the group chose to introduce a flat rate top-up of 1c/L on all milk except fixed price contracts.
Commenting on this, Quain said: “This is a little cute on the part of Kerry Group, but it’s also a little transparent.
“Instead of just increasing the base price – which was already behind other co-ops and very notably behind the Ornua PPI [Purchase Price Index] – Kerry has decided on a flat rate of 1c/L without reference to solids and not to be paid on forward contracted supply.
The chairman noted that the absence of reference to solids will result in losses of almost 0.1c/L on every litre for the average Kerry farmer-supplier’s average constituents for July milk.
Conceding that this is “not a lot of money”, Quain highlighted: “It’s the penny-pinching attitude on display from Kerry Group that will strike many of us.
“And, if it’s not a lot of money, then why didn’t they just pay the solids-based extra 0.1cpl?”
Quain also questioned the processor’s move to exclude the forward contracted fixed price supplies from the 1c/L top-up, adding:
“ICMSA has had occasion before to criticise co-ops for attempting to make bonuses and discretionary ‘top-ups’ arbitrary and at the whim of the processor.
“I have to say that it wasn’t Kerry Group who led the way on this – but that’s all the more reason why they shouldn’t go down the road of subdividing farmers and their supplies on this seemingly random basis.
“Confusion and irritation can easily be avoided if all processors just paid the highest base price that they could as derived from the Ornua PPI,” the ICMSA dairy chairman concluded.