Glanbia ups Wexford Creamery shareholders cash payment to €10m

Glanbia Ingredients Ireland has substantially increased its cash payment to Wexford Creamery members from €3.7m to €10m, in a move that has quelled disquiet among milk suppliers.

Glanbia will also invest €5m in the Wexford plant.

Discussions are under way with the board of Wexford Milk Producers to release an extra €6.3m as an up-front payment to be spun out on a basis agreed by the board.

Glanbia Ingredients CEO, Jim Bergin, says this additional payment reflects the loyalty of its active members.

“The commitment of loyal Wexford suppliers to supply their milk to [Glanbia Ingredients] has ensured a successful transaction.

“We feel it is fair that this commitment is reflected in an increased up-front payment,” he said.

A long-term investment would remain in the form of preference shares.

All of Ireland’s main milk processors are currently putting supply plans in place as part of their plans for post-quota growth.

In many cases, proposed milk supply agreements have met supplier resistance.

Glanbia Ingredient’s enhanced offer to Wexford Milk Producers’ suppliers should minimise future supplier dissent.

Mr Bergin assured all Wexford milk suppliers they will be treated equally with Glanbia Ingredients suppliers. This includes receiving the same milk price, representing a rise of around 2c/litre on the average of the last two years.

Wexford suppliers will also have access to the Glanbia Ingredients index-linked fixed milk price scheme. The €5m milk price stability fund will be supplemented to allow Wexford suppliers to benefit on an equal basis to their Glanbia counterparts.

A series of meetings will be held in June where all benefits of the new relationship and of the Glanbia farm development service will be explained in detail.