Milk suppliers protest against cut
The 320 farmers involved provide liquid milk that which consumers purchase in the shops to the Dawn Dairies plants in Killarney, Limerick and Galway. Yesterday, the farmers claimed they would bear losses of between 10 cent and 13 cent per gallon, with some suffering a 20% drop in income as a result of the reduction.
However, the group insisted the cuts would average six to seven cent and urged suppliers to face up to market realities, pointing out that lower-priced milk from the North had 16% of the market in the Republic. Last weekend, 250 Kerry supplier/shareholders attended a stormy meeting, in Limerick, at which, sources claimed, a vote of no confidence was passed in management.
"Feelings ran very high and the unanimous view was that the group management should not proceed with the cuts," said those who attended.
IFA Liquid Milk Committee chairman Donal Kelleher said further action may see a U-turn by Kerry Group. "Either way, this price cut will have to be looked at again," he added.
But Kerry Group corporate affairs director Frank Hayes yesterday said the new pricing structure had to be implemented in order to sustain business going forward.
With milk from outside the Republic pouring in, he said the retail market had changed greatly. "We had been grappling with trying to sustain a price paid to suppliers that had not changed for five years," he said.
"For the past two years, we've been having discussions with advisory committees and liquid milk suppliers in regard to a new pricing structure.
"Faced with falling returns and new levels of competition, we've had to move to a new structure in order to sustain our business and this has also to be in the interest of the supplier," he went on.
Mr Hayes said a 44 cent winter premium would be paid from November to February to reflect increased costs.
Also, a new price for the remainder of the year would be based on the quality of the constituents in milk supplied.
