Stage is set for second Glanbia vote

Members of Glanbia Co-op are already starting to focus on how they will manage their evolved milk processing responsibilities after their massive vote in favour of the Plc’s joint venture proposal.

Nobody was surprised by the outcome of the vote. While there have been some respected voices of opposition, some 71% of the record turnout of voters were happy to approve the purchase of 60% of Glanbia group member Dairy Ingredients Ireland via the joint venture, with Glanbia Plc retaining the remaining 40%. The new joint venture will be called Glanbia Ingredients Ireland (GII).

Ever since the rollout of the agri-food industry’s own Food Harvest 2020 blueprint for food export expansion — with its planned 50% jump in dairy exports — the big glaring question was who was going to pick up the tab for the capital investment into additional processing.

From day one, speaking via representative bodies such as IFA, ICMSA and ICSA, Ireland’s farmers have always said that they would be willing to pay their share.

Of course, some might say that yesterday’s vote by Glanbia Co-op members was at least partly the result of co-op shareholders looking down the road to likely financial rewards from a potential jump in the value of their shares — with at least one eye back to the fortunes of similar moves for Kerry Co-op shareholders. There’s certainly some truth in that, but this just simply underlines their determination and belief that they can make money from ownership of their own milk processing destiny.

All of the key farmer groups have interpreted this Glanbia Co-op vote as the dairy sector’s vote of confidence in itself and in its own immediate future.

Macra president Alan Jagoe called for another emphatic ‘yes’ vote in three weeks’ time when 75% of shareholders will be required in a second ballot for the Co-op to cut its stake by a further 10% to 41%. That vote will be held in two stages on Nov 28 and Dec 12.

ICMSA president John Comer said that, by voting yes, farmers had accepted in good faith the assurances given to them by the Glanbia board in terms of milk price and the opportunity to maximise their returns.

IFA president John Bryan said the establishment of GII clears the way for further consolidation in the sector, and the opportunity must be grasped. He said the debate on the pros and cons of the JV, while intense, is now over. As such, he suggested all farmers should now unite and support the second proposal in a few weeks from now.

It will be interesting to see if that is, indeed, how the second vote pans out.

Farming Editor Stephen Cadogan returns next week.