Kinisla has said that any audits or inspections carried out under clause 14 of its milk supply contract "would be carried out exceptionally, and for legitimate animal welfare or food safety purposes".

The processor made the comments in a response to queries raised by the Irish Farmers' Association (IFA).

A delegation from the IFA met with management from Kinisla - formally known as Kerry Dairy Ireland - last week to discuss farmer concerns in relation to the business' new milk supply contract.

That meeting followed two IFA-organised farmer meetings in Kerry and Limerick early this month. The Kinisla milk supply contract was one of the issues that came up at those meetings.

The IFA’s solicitor James Staines attended the meetings to deal with queries on the contract.

IFA dairy chair Martin McElearney said that a number of queries had arisen at the meetings, and that the association had agreed to seek clarification on these from Kinisla.

Following the meeting with Kinisla, IFA Kerry dairy chairperson Owen O'Sullivan, who led the IFA delegation, said the meeting was "very constructive".

The IFA said that it was agreed that it would publish the replies from Kinisla on the farmer queries. The farm organisation published those replies today (Friday, July 17).

"We will continue to work with suppliers to address their concerns," O'Sullivan said after the IFA published the Kinisla replies.

Audits

The milk supply contract sent out to farmer suppliers by Kerry Dairy Ireland - as it was then known - was subject to criticism from the Munster Dairy Producer Organisation (MDPO), a producer organisation formed by suppliers who supply milk to the business.

One of the points of criticism from the MDPO was on the audit rules under the contract.

Clause 14 of the contract states that Kerry Creameries Limited (KCL) - the wholly owned subsidiary of Kinisla that actually purchases milk from farmers - or its authorised representatives will have the right on "reasonable notice" (or without notice in cases of "suspected non-compliance") to access the supplier's premises, equipment, livestock, records and production processes for the purpose of audits.

According to the contract, these audits, when carried out, will check for compliance with the contract itself and the processor's Milk Grading Scheme; adherence to applicable laws and industry standards; and any records relating to milk testing, veterinary treatments, feed inputs, herd health and milk storage.

The MDPO had criticised the scope of these audits.

In its respone to IFA queries, Kinisla said: "As a food businessoperator, KCL has an obligation to ensure that the raw milk it purchases is safe and complies with applicable food safety standards.

"Like other dairy processors, KCL reserves the right to carry out reasonable inspections and audits of the milk production enterprise where necessary to verify compliance with the requirements of applicable standards," the processor added.

"Any inspection or audit under 14.1 [of the contract] would be carried out exceptionally, and for legitimate animal welfare or food safety purposes and would be limited to the milk production enterprise," Kinisla said.

It said the word "premise" in this clause of the contract would not include the milk suppliers private dwelling house.

Milk supply contract

In response to the IFA, Kinisla also said that it is not obliged to collect milk from an individual supplier who has not, on or before August 4, signed the milk supply contract, notwithstanding that the supplier in question might be a member of Kerry Co-op, the majority shareholder in Kinisla.

Kinisla also said that, if a milk supplier permanently stops producing milk and terminates their agreement under clause 9.3 of the contract, their agreement comes to an end and they are free to sell or lease their farm without the contract continuing to bind the new owner or lessee.

Kinisla confirmed that different provisions apply where a milk production enterprise is consolidated, assigned or transferred while the contract remains in force, as set out in clause 11 of the contract.