Dairygold stands firm on deal date

DAIRYGOLD is to force through its planned rationalisation programme before the end of the month with the company warning that today’s deadline for offers of voluntary redundancy would not be extended.

Management and unions meet today at the Labour Relations Court for conciliation talks on the planned 500-job redundancy package.

Unions are furious at the giant co-op’s threats to enforce redundancy after December 26.

But a Dairygold spokesman revealed the company will strongly advise the Labour Relations Commission that rationalisation changes are urgently required to save the business.

Fully committed to its ‘right-sizing programme’ announced last week, the company said it “cannot deviate from its stated path”.

The company said the voluntary redundancy triggered a significant volume of applications from staff, with employees showing strong interest in the €50m severance package.

Dairygold milk processing operations lost €13 million in 2002 with the company projecting losses of €3m this year.

The company conceded its cost base was well out of line with rival cooperatives in both the domestic and export marketplace. “In order for the company to gain market share it needs to get its costs into line with competitors,” a Dairygold spokesman said.

The company is blaming job losses on collapsing milk prices and EU agri reforms. The co-op claimed the CAP review agreed in October will significantly reduce price supports by 25% for butter and 15% for SMP.

It further suggested enlargement of the EU will extend the European market eastwards to encompass Poland where milk production was over twice that of Ireland.

Dairygold has also pointed to the FABRI-Ireland farm model which predicts a 40% reduction in dairy farmers post-decoupling.

Anticipating that decoupling will have a negative impact on agri-input sales, the Dairygold spokesman said its high cost base prevents the company from competing effectively in the growing market for own-label retail dairy products.

Dairygold claimed the severance terms, recommended by union and management representatives on its Joint Negotiating Forum (JNF), were accepted by an overwhelming 80% majority of staff.

Dairygold added it “was ‘right-sizing’ the business for the sake of the majority of employees, shareholders, and the community in which it operates.”