Dairygold has moved to quell concerns about its debt levels, raised at a 300-strong farmer meeting in Mitchelstown, Co Cork on Monday night.

Anger over the co-op’s December announcement of changes to its loyalty bonus terms was the initial focus of the meeting, which was organised by Cork-based Dairygold supplier Niall Twomey.

However, farmers raised concerns about the co-op’s milk price and position in the milk league, debt levels at the co-op, Dairygold management and board representation.

Former Minister of State and Cork east TD Ned O’Keeffe told the gathered crowd that the issues in Dairygold were “much bigger than the bonus you are all talking about”.

“I think the borrowing at Dairygold is very frightening,” he said, adding that he heard the interest amounted to €20m per year or €400,000 per week.

“Dairygold has to have a rationalisation process urgently, and to scale down its operation if you’re going to get a price for milk.”

The co-op’s 2023 accounts show it paid €22m in interest payments on debt.

I think the borrowing at Dairygold is very frightening,” he said, adding that he heard the interest amounted to €20m per year

Responding, Dairygold told the Irish Farmers Journal that, despite the concerns aired at the meeting: “Dairygold’s net bank debt remains at a very manageable level, within our banking covenants, and our strong balance sheet provides the flexibility to continue to invest in higher margin activities.”

It added that capital investment projects over the past decade provided a “world-class dairy processing infrastructure” that facilitated its members’ expansion and would “pay dividends into the future”.

Niall Twomey opened the meeting by calling on all suppliers present to terminate their milk supply contracts with the co-op. Later, a show of hands confirmed three demands should be made of Dairygold board and management.

These were that the loyalty bonus scheme terms be dropped with immediate effect, that capital investment by the co-op be shelved and that the required notice period to leave the co-op be reduced to three months.

A committee was formed on the night consisting of Niall Twomey, Eoin Burke, Ned O’Keeffe, Tadhg McSweeney and later joined by Nigel Sweetnam.