Kerry milk suppliers are “returning to arbitration” to try and hammer out a conclusion regarding the “leading milk price” issue, a former chairman of Kerry Co-op has claimed.

In a statement today (Wednesday, April 7), James Doyle, a dairy farmer from Beaufort, Co. Kerry, former co-op chairman and lead negotiator for milk suppliers in the original arbitration case, said:

“I, on behalf of the 2,700 Kerry milk suppliers that signed the original arbitration forms, have decided once again to go back to arbitration to finally conclude matters.

“My decision was not taken lightly and was taken after considerable time was given to Kerry Group plc and Kerry Co-Op to finalise and pay out what is owed to us milk suppliers.”

Noting that 19 months have passed since the arbitrator ruled in favour of Kerry Co-op, which was acting on behalf of its milk suppliers, Doyle said that the arbitrator had invited both sides to reach an agreement over the money owed to milk suppliers.

“If this was not possible, either side could return to arbitration where the arbitrator would finalise this process and calculate what monies to be paid over by Kerry Group in what would be a legally binding final decision on this matter.”

‘Leading milk price’

The nub of the case relates to whether or not the four west Cork co-ops that form Carbery Group (Drinagh, Barryroe, Bandon and Lisavaird) could be included in any “like-for-like milk price” comparison in Kerry Group’s commitment to pay the “leading milk price” in its milk supplier contracts, Doyle explained.

“Now that the arbitrator’s binding decision makes it clear that the four west Cork co-ops must be included in any such milk price comparison, amazingly Kerry Group plc’s standing position remains the same – that they honoured their commitment to pay the leading milk price in Ireland on a like-for-like basis,” he claimed.

The former chairman claimed that “detailed and careful calculations” show that Kerry Group owes 8c/L to its milk suppliers for the years 2015 up to and including 2020 to match the leading milk price paid by the west Cork co-ops on a like-for-like basis, stating:

“This equates to €40,000 owed to a Kerry milk supplier supplying 500,000L annually for these years or 96m on the 1.2 billion litres collectively supplied to Kerry Group plc.

Doyle claimed that Kerry Group had not honoured its commitment since September 2019.

Joint venture

On the topic of the proposed joint venture that is subject to ongoing discussions, the Kerry farmer said:

“Kerry milk suppliers feel these are two completely separate matters and the milk price commitment needs to be fully finalised and resolved before there are any discussions about a joint venture.

“Kerry milk suppliers could never accept the previous conditional offers from Kerry Group plc of 1.75c/L if we drop the right to arbitration some years ago or more recently 4c/L if we buy a 60% stake in their primary dairy business.

“Such conditional offers, if we accepted, would break the legally binding commitment in the Milk Suppliers contract to paying the leading milk price thereafter,” the farmer concluded.

Kerry Co-op stance

Meanwhile, a spokesperson for Kerry Co-op said:

“As the designated representative of all milk suppliers, Kerry Co-operative Creameries Limited wishes to confirm that it is not supporting any current legal action concerning the arbitration process.”