Merger of Arrabawn and Tipperary co-ops to be completed next week

Arrabawn Tipperary Co-op is set to start business at the end of this month, with Friday 28 February set as the launch date for the new business.

Members of both co-ops had voted overwhelmingly in favour of the merger in the first week of November last year, but the project had been on ice as both organisations awaited regulatory approval from the Competition and Consumer Protection Commission.

That has now been granted, with both Arrabawn and Tipperary sending messages to members telling them that the new co-op, to be called Arrabawn Tipperary Co-op, will be up and running on 28 February when the merger completes.

The new business, which will be led by current Arrabawn CEO Conor Ryan until at least October, will have a 19-member board consisting of 14 members from Arrabawn, five from Tipperary and two independents. The board split reflects the relative pre-merger size of the two processors. After two years, the board will be cut to 14 members.

Fifth largest processor

Once it is up and running, the new processor will be the fifth largest in the country behind Tirlán, Lakeland Dairies, Kerry and Dairygold. Due to Arrabawn’s low debt levels the processor is projected to have, even after taking on Tipperary’s borrowings, a debt-to-earnings ratio of approximately 2.6 times at the end of this year.

The Irish Farmers Journal milk league for 2024 showed that Arrabawn’s cumulative payment to farmers for the year was close to the average in the country, while Tipperary was at the bottom. A farmer supplying 500,000l at national average milk solids would have been approximately €7,800 better off supplying Arrabawn than Tipperary last year.

Arrabawn chair Edward Carr reassured members of that co-op ahead of the merger vote that the merger “is not a risk to milk price”, adding that “this is to copper-fasten the position we have in paying one of the top milk prices”.