Door still open on Kerry deal

The Irish Farmers Journal understands Kerry plc has confirmed to farmers that while talks are suspended on a joint venture deal, it might not necessarily be the end of the matter.

Following an offer made by Kerry Co-op for the dairy business, Kerry plc released a statement which effectively suspended negotiations between Kerry Co-op and the Kerry Group on a possible joint venture or buyout deal.

This week there are tentative signs that talks are continuing quietly behind the scenes, with confirmation to farmers that a deal could still be possible.

ew details have also emerged on the leading milk price issue.

New deal

There are reports that a new independent panel could be created that would negotiate between the plc and farmers. This independent panel would have to get a mandate and backing of the co-op board to negotiate on behalf of the board towards a deal that works for both parties. The co-op board is due to meet again next week.

Now that due diligence is complete on the dairy business, if there is willingness on both sides to do a deal, something could happen quickly.

Gathering of signatures to request a special general meeting of shareholders continues

It is understood new milk supplier groups are being established in the Kerry catchment to discuss alternative ways a deal might be possible to bring milk processing back under farmers’ control.

Gathering of signatures to request a special general meeting of shareholders continues.

Speaking to some farmers this week, they are confident the threshold of 20% of signatures and 20% of share capital can be met, but it not clear how many signatures have been gathered.

The Kerry Co-op AGM is coming up next month. There are also unconfirmed reports that Kerry Co-op CEO Thomas Hunter McGowan’s contract is soon up for renewal.

New details have emerged on specific conditions attached to the 3c/l ‘goodwill’ payment agreed in late 2019, and paid to Kerry suppliers in 2020.

It is understood that one of the conditions signed up to by both parties at the time was that the ‘goodwill’ payment could be offset against any year of the milk price contract.

Secondly, it is understood that there was a commitment given by both parties that there would be no return to arbitration within five months of any joint venture deal suspension.

The Kerry Agri boss was definitive that no further money was owed on the ‘leading milk price’

Both of these conditions weren’t made public prior to this week and some say Kerry Co-op board members weren’t made aware that these conditions were attached to the once-off payout.

At a Kerry Co-op Clare advisory meeting last week, Kerry milk suppliers heard from the co-op’s Thomas Hunter McGowan, Mundy Hayes and Kerry Agri’s Pat Murphy.

The Kerry Agri boss was definitive that no further money was owed on the ‘leading milk price’. It is understood he said now that notice has been sent to suppliers cancelling the contract, there won’t be a reference to leading milk price in the next contract.

Also, he warned if there is another contract the clause around processing capacity will be different to the 120% reference volume in the current contract.

Read more

Kerry Group announces milk price for April

Kerry Co-op stalls on returning to arbitration

Kerry milk contracts terminated

Editorial: Kerry opportunity must not be squandered