Only 128 share sales over seven years

Revenue is basing its valuation of the co-op shares purchased through the patronage scheme on a tiny volume of traded shares.

Every transaction on the internal “grey” co-op trading market is listed in the information circulated within Revenue in recent months.

In 2011, only five of the 13,000 Kerry Co-op shareholders traded shares according to Revenue records. On the basis of this handful of trades, Revenue placed a value of €65 on each co-op share, and wants any co-op shareholder who bought shares through the patronage scheme in that year to pay tax on the shares purchased as if they were income. This would leave any milk producer in the higher tax bracket paying €30/share purchased.

A farmer buying 100 shares at €2 apiece would therefore have a tax liability of €3,000.

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Trading did increase in 2012 and 2013, but the total number of trades in each year was less than 50 – still less than one half of 1% of the co-op’s shareholder register. In other words, only one in 250 people who owned co-op shares traded some or all of their shares.

With the 3,400 milk producers only accounting for 25% of the co-op’s 13,000 shareholders, it is reasonable to assume that the majority of shares traded were by non-participants in the patronage scheme. Indeed, “dry” shareholders – non-active milk suppliers – have far less reason to hold on to shares and maintain membership and voting rights in their co-op than milk suppliers, so it is reasonable to assume that even less than one-quarter of the share trades involved patronage share participants.

Grey market

Trading of shares in Kerry Co-op is allowed, but only with the approval of the co-op board. The value of the shares traded is agreed in each case between vendor and purchaser, without the knowledge or involvement of the board.

The value of the shares is included for each transaction in the information circulated within Revenue, but not the volume of shares traded.

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