Glanbia Co-op announces changes to trading and bonus scheme

Milk-supplying members of Glanbia Co-op are set for a 0.4c/l payment each month on all milk supplied in 2020. The payment – which is the co-op’s share of Glanbia Ireland profit – will be adjusted to reflect the actual constituents of the milk delivered.

The co-op, which owns 60% of Glanbia Ireland, receives a dividend each year, which amounts to around €18m.

It was agreed in 2017 to ring-fence this dividend for active farmer members of the co-op. This will see a farmer supplying 500,000 litres of milk per year receive €2,000 over the year.

Based on Glanbia Ireland’s milk pool of 2.9bn litres, the co-op will allocate some €11m to this scheme. The balance of the dividend will be allocated to other trading schemes as outlined below.

Trading bonus scheme

This scheme will reward farmer members of the co-op for purchases (ie feed, seed, fertiliser chemicals, etc) made from Glanbia Ireland.

For milk suppliers who are members of the co-op, the bonus could be worth up to 0.4c/l on all milk delivered in 2020. This would see a farmer who supplies 500,000 litres receive €2,000 if the farmer spends over 8c/l or €40,000 per year.

If the spend is between 5c/l and 8c/l, the trading bonus is 0.2c/l, which works out at €1,000 on a spend of €25,000 to €40,000 on a 500,000-litre supplier.

For non-milk suppliers (ie beef, sheep and pig farmers) who are members of the co-op, there will be a discount of €10/t on feed products. For grain growers, a trading bonus of up to €10/t of grain supplied in 2020 will be available.

The 2019 trading bonus scheme will return almost €14m to active farmer shareholders

Glanbia chair Martin Keane said: “The Glanbia Ireland profit payment and the trading bonus scheme are equitable, transparent and more-immediate means of returning the co-op’s share of Glanbia Ireland profit to our active farmer members.”

The 2019 trading bonus scheme will return almost €14m to active farmer shareholders.

There is a clear path for young, active farmers to join Glanbia Co-op

Separately, the co-op is changing the criteria for admission of new members. Keane said this will “ensure there is a clear path for young, active farmers to join Glanbia Co-op and also to consider becoming involved in the representative structure of the co-op”.

The rules have been simplified, where new members will now be required to hold 1,000 shares in the co-op rather than the previous requirement of 2,000 shares. Shares in the co-op are currently valued at €5 per share.

The minimum shareholding required to become a member of the Glanbia representative structure has also been reduced to 1,000 shares. Keane said: “This makes committee membership more accessible to a greater number of A1 members.”