Kerry: Co-op takeover speculation

KERRY Group yesterday described a report that it is considering making a bid for Newmarket Co-op as purely speculative.

However, a spokesman for the food giant did confirm that it has a very close working relationship with the Co Cork society which has an eight million gallon milk pool.

Newmarket, which has a highly efficient cheese plant withcapacity to process some 60 million gallons of milk, declined to comment on the report, published in the Irish Farmers Journal.

Goodbody analyst Liam Igoe said the purchase, if it went ahead, would give Kerry a cheddar cheese manufacturing facility aimed at the British market.

“We would not expect that the deal, if completed, would have a material impact on earnings. But it would give the company more options, especially against some uncertainty with regard to supplies to Cadbury, resulting from its imminent takeover by Kraft,” he said.

Dairy industry sources said any moves by Kerry towards acquiring Newmarket were at a very early stage and no formal proposals are on the table.

Newmarket has 150 active suppliers and more than 700 shareholders. Last year, it completed a €16.8 million expansion of its cheese plant.

The possibility of a Kerry bid for the co-op, which recorded sales of €87.6m in 2008, came as moves to rationalise the overall Irish dairy processing sector intensified.

Dairy society chairmen and chief executives are due to attend the latest in a series of meetings in Abbeyleix, Co Laois, today, hosted by the Irish Co-operative Organisation Society (ICOS), the co-ops national umbrella body.