The Irish Farmers Journal understands that talks on a proposal on the future of Kerry Group’s dairy processing operation are progressing and that a proposal may be in place by the end of October.

While there is no indication that a deal will be reached, and both sides have been here before, there does appear to be willingness to progress at board level in both organisations.

For milk-supplying members of the co-op, the outstanding issue of the leading milk price may need to be resolved before they will support any deal. At the Kerry Co-op AGM in July, farmers were told money outstanding for the leading milk price was 7.39c/l plus interest. The board assured those gathered at the meeting that the arbitration matter would be resolved ahead of any proposal on a joint venture.

In order to expedite that issue, Kerry Co-op appointed leading corporate law firm RDJ LLP to help find a resolution, and the Irish Farmers Journal understands there have already been meetings with all sides seeking a resolution.

Further complicating any deal on a joint venture is the ownership of Kerry Co-op, where many of the shareholders are not milk suppliers, and may have little interest in purchasing a dairy processor. As part of the 2020 proposal, which failed to progress, it was suggested that Kerry Co-op be liquidated, giving shares in Kerry Group in return for Kerry Co-op shares. Farmer suppliers would then have been asked to invest to become majority shareholders in a joint venture dairy business, which Kerry Group initially valued at €1bn.

That deal failed to progress and it seems that, if anything, relations between Kerry and its milk suppliers have deteriorated further.

The Munster Dairy Producer Organisation, formed earlier this year to negotiate milk supply contracts on behalf of members continues to attract farmers, with approximately 325 signed up, amounting to a 200m litre milk pool.