Kerry's clear mandate means a new dawn for all

In the end, the Kerry Co-op vote wasn’t even close. After the High Noon showdown between all shades of opinion on Monday, the yes vote sailed way past the two-thirds majority needed. The 82% in favour is a good thing for all sides, as there need be no recriminations, ifs or buts now.

They say success has many parents, and quite a few people played a significant role in assembling this complex deal and pushing for it’s approval by the co-op. The first has to be co-op chair, James Tangney. Elected a year and two days by the lottery of having his name pulled from a hat following a tied vote with outgoing chair Denis Carroll, he finally got this deal over the line. That was no mean feat when so many different factions existed, among the shareholding and even within the boardroom.

In fairness to Carroll, it was under his reign that the key moment may have occurred. Appointing Jim Woulfe to negotiate on behalf of the co-op addressed the lack of business experience on the co-op’s side of the table.

There is a symmetry in how Woulfe, as the CEO of an embattled Dairygold, sold some prime brands to Kerry Group, and then a decade later found himself facilitating the sale of those same brands to Kerry Co-op. If nothing else, it gave credibility to him having a deep understanding of the value of the brands and businesses he sold. There is now a huge onus on Tangney and his board to get to grips with the responsibility they have taken onto themselves. Previously little more than custodians of the co-op’s shareholding in the plc, and advocates on behalf of the milk suppliers, they now have to set the strategy and hire and support executive management. The board is still quite unwieldy, with 21 on board, but the ongoing board rationalisation begun by Mundy Hayes and Thomas Hunter McGowan did add coherence to its functioning.

In terms of management, Kerry Dairy Ireland CEO Pat Murphy and agribusiness manager James O’Connell have key roles now. On the Kerry Group side, this is a triumph for Edmund Scanlon. He has unloaded a low-margin, high-emission business for close to the ceiling of its market value, with the co-op’s significance as an institutional shareholder, one the markets weren’t fond of, all but evaporated. He and his board, particularly chair Tom Moran, will have a good Christmas.

For those who opposed the deal, either due to its structure or its price tag, it’s now time to work to make the best of the deal that has been agreed. “Leading milk price” is now an internal co-op issue, not an external arbitration process.

For the Munster Dairy Producer Organisation, there is now clarity around its processor’s future. They have 12 months to decide if they want to be a part of it. However, there is a need to address the co-op share register. Dry shareholders need a way out, and all milk suppliers should be offered a cost-effective way to share up. Could those two requirements be met by a single event or instrument?