A decision is coming closer on the dispute over a 13th milk payment to Kerry Group milk suppliers for 2015. Both Kerry Co-op on one side and Kerry Group on the other have now submitted their respective claims to an agreed firm of legal arbitrators.
The arbitrator is expected to begin examining the issue at the start of next month, once the traditional legal holiday period ends, and then issue a binding decision.
The milk supply agreement signed by Kerry suppliers and the Group specifies that Kerry will pay the leading milk price in the country and this has resulted in so-called 13th payments being paid in previous years.
Kerry suppliers have calculated that they need a 1.4c/l top-up for 2015 to have their price match those paid by the West Cork co-ops. Kerry Group merely gave a top-up payment of 0.6c/l for all milk supplied in 2015, which it said was to recognise the difficulties suppliers faced in 2015.
But Kerry Group management has claimed to representatives of Kerry Co-op that the West Cork co-ops must be excluded from milk price calculations as the co-ops do not themselves process milk but merely supply it to Carbery. Suppliers maintain that West Cork milk prices were included in previous years.
Kerry Co-op representatives expect that the arbitrator will clarify this point. They calculate that Kerry milk has fallen even further behind prices paid by the West Cork co-ops in 2016 with the gap at this stage having widened to approximately 1.8c/l. The monthly price is set by Kerry Group.
Kerry Co-op calculates the relative position of Kerry price by imposing actual monthly figures for milk solids on the Kerry milk supply curve of the previous year. At year-end, the result is recalculated using the actual supply curve.