It didn’t take long for farmers to send a shot across the bow of Glanbia Ireland, the State’s largest milk processor, which will soon, barring any regulatory hiccups, be fully owned by Glanbia Co-op.
Co-op members voted on Friday in favour of a deal to buy the remaining 40 per cent stake in Glanbia Ireland from Glanbia plc. The €307 million deal gives the co-op 100 per cent control of Glanbia’s spun-out dairy business, responsible for popular brands like like Avonmore, Kilmeaden and Premier.
Shortly after the vote, Pat McCormack of the Irish Creamery Milk Suppliers’ Association (ICMSA), warned, however, that the new board’s competence will be based on the strength of the milk price it pays to farmers.
ICMSA has continually complained about the price Glanbia Ireland pays suppliers, claiming it is regularly lower than rivals Kerry and Dairygold.
“First, second, and last their competence will be judged on their ability to climb the milk price league from the lowly position they have been occupying for an unforgivably long time,” McCormack said.
“The days are long, long, gone when farmers were unable to establish exactly what their price should be. We have access to exactly the same information as the processors, and can analyse the markets just as closely,” he said.
The Irish Farmers’ Association (IFA) dairy chairman Stephen Arthur made similar comments, noting there was an onus on the board to pay a strong price to farmers that secures their livelihoods.
“They also have to run the business efficiently and leanly so it can maintain a market-leading return to its suppliers while remaining profitable,” he said.
The dairy industry here has been on a massive expansion curve since the lifting of EU milk quotas in 2015 and global dairy markets have held up pretty well during the pandemic but prices are notoriously volatile.
In 2014 milk became cheaper than bottled water in most supermarkets as prices plummeted as a six-year China-driven boom in milk demand stalled.