Kerry Co-op debate continues ahead of vote today
Further Kerry Co-op milk suppliers have voiced concerns about the direction of the cooperative ahead of the entity’s annual general meeting (AGM) today, Wednesday, June 19.
Co-op members travel to the Brandon Hotel, Tralee, where a vote will be held on two rule changes regarding the organisation’s Share Redemption Scheme, which has sparked considerable debate since its announcement last month.
Cooraclare farmer PJ McGuane, well known in co-op circles, said that, as the proposed share scheme seems to be in place already, there is “no point in going to Tralee” to vote for rule changes.
Commenting to AgriLand yesterday, he said: “Mundy Hayes, the chairman of Kerry Co-op, said this morning that the scheme is going ahead regardless of the vote. He is on AgriLand this afternoon telling us to go down to Tralee to vote to bring in the scheme.
“I have no problem with the people who voluntarily applied getting their money. But the people who didn’t apply want their Kerry Group plc shares spun out in full. That is what we are asking for since 2016.
“The current board should have a plan for that – or at least they should be able to say when they will have a plan.”
Giving his views on what he sees as the contrast between past and present, Brosnan said:
“The Kerry Co-op board in the past discussed everything until everybody around the table understood and supported a rule change.
“We were able to go out to the members and get backing for changes that have proven to be of benefit to all members.
The current board is divided and that is not right. They have no overall strategy. There is too much confusion.
Pat Minogue, from Scariff, said this scheme will not get the section 701 needed for the co-op to spin-out the plc shares.
“My main concern is that it will make it more difficult to bring in a redemption scheme that will get us to 701.
“You would have to give full value for people to redeem all their shares over time. This scheme doesn’t do that and the proposed rule changes will make it harder to do it. I will be voting no.”
Kilmallock farmer Michael Aherne’s view is that shareholders want to access their funds in the most tax efficient manner and suppliers want a new representative structure.
“A scheme based on income tax is the worst option the board could choose, I will be voting no to the board’s proposal.”
“This scheme doesn’t make sense, the board have to get serious and bring in a CGT scheme at the same time as a proper redemption scheme.”
Sean Bugler, who farms in Scariff in east Clare, is disappointed at the division this proposal has caused. “Eight of the 28 directors on the board of Kerry Co-op voted against this scheme. Some of the directors that voted for it did so against the wishes of their advisory committees.”
He added that if the other rule changes go through, members will have “signed away 5% of their holding with no plan and exposed the co-op and the remaining shareholders to a massive tax wedge as the co-op shareholding in the plc winds down”.
East Limerick farmer and former board member Denis Wallis outlined his view that, as the scheme seems to be in place already, he needs to explain why it no longer needs shareholder approval.
This matter is causing a lot of confusion. The current board should have a clear plan before asking shareholders to vote for rule changes.
“The vast majority of shareholders didn’t apply for the scheme. They want their Kerry Group plc shares spun out. That is clear from last year’s AGM.”
Yesterday, Kerry Co-op board chairman Mundy Hayes put forward his views on the merits of the scheme.
The chairman argued that the scheme would have benefits for older members who would have bought shares as far back as the 1970s, and who don’t realise the current value of their holdings.
Kerry shares are very valuable. No one who bought shares in the 1970s could envisage where things would go. Some people may be unaware of the value of shares they hold.
He said this was particularly important for older members.
“Situations might arise for families when people pass away. For some of them, they don’t realise the value of the asset they’re sitting on. These people were investing in their future,” he said.