There are calls for any potential deal involving the milk processing division of Kerry Group to be subject to the approval of milk suppliers.
Following the circulation of a document outlining the terms of a potential deal, the Irish Creamery Milk Suppliers’ Association (ICMSA) said that it has been “inundated with calls from concerned Kerry milk suppliers” in relation to the future structure of the processing facilities.
ICMSA president Pat McCormack said today (Friday, April 9): “It is high-time that clarity was brought to this issue and assurances given to milk suppliers.
“The dairy sector in the Kerry catchment area is of huge importance, not only to the farm families directly involved in supplying milk, but the wider rural economy.
“It is absolutely essential that the processing facilities that process the milk are structured going forward in a sustainable manner that delivers a strong return to milk suppliers,” McCormack said.
He added: “This matter has been concerning farmers for many months and the leaked document has heightened the concerns of suppliers.
“The farmer-suppliers are clearly saying that the future structure must be sustainable – and be seen to be so – if a deal is concluded.
“The uncertainty around this matter needs to be resolved as soon as possible and, critically, any decision taken must be approved by milk suppliers in advance of concluding the deal,” the ICMSA president concluded.
Kerry Co-op proposal to buy dairy business
Kerry Co-op could buy the milk processing division of Kerry Group in full over a three to five year period under a proposal tabled to the cooperative in ongoing discussions regarding a joint venture between the two entities.
This is according to an advisory document offering a transaction overview of the proposed joint venture, dubbed “Project Seafield”, as seen by Agriland.
The document, which focuses on key legal exposures that may be present in such a transaction, notes that the first step of this proposal would be the purchase by the co-op of 60% of the new entity formed by the joint venture.