Glanbia: No plan B in sale scenario
Sources close to the talks have warned that, even if farmers reject the proposed sale, the current tensions between both sides now make a parting of the ways inevitable.
Larry Harte, a lecturer in agribusiness at University College Dublin said alternative strategies are available to the co-op. They could in time return the entire Glanbia business to the co-op model by gradually divesting its international assets and returning the money to farmers.
In an interview with the Irish Farmers’s Journal yesterday, Mr Herlihy said the ending of quotas in 2014 offers unprecedented opportunities in the period ahead.
And the proposed buy-out “is part of shaping farming for the next 10 years” in the region.
He said a lot of mistrust exists between farmers and the plc and the co-op board is convinced that the future of its dairy farmers is best served by a well run and well invested co-op.
That has been the experience internationally, he said.
Geoff Meagher, a key adviser to the co-op on the proposed buy-out, supports his view. The retired deputy chief executive of the group has been drafted in by the co-op board to help them secure the deal.
Mr Meagher told the Irish Examiner that the dairy business in Ireland, which employs 1,900 people, has the capacity to deliver earnings of €70m annually.
The history of the business underlines that fact and he said this level of earnings is on track in the current year.
That is sufficient to allow further development of the Irish business under co-op tutelage and to allow participation in further rationalisation of the sector, if that comes about.
Going forward the co-op will have to be totally commercially driven and his support for the deal, and his willingness to step in as an interim chief executive until a full-time replacement is found is contingent on that.
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