Farmers angry over share buy-back

West Cork farmers are up in arms over a decision by a leading cheese manufacturer to buy back shares issued to former milk suppliers.

A public meeting will take place in Dunmanway next week over moves by the Ballineen-based firm Carbery to buy back shares from farmers who have ceased supply and production in the last three years.

The shares, issued to suppliers on an annual basis since 2002, are scheduled to be bought back from former suppliers in April.

“A lot of people have expressed outrage at the fact that they are being literally ordered to sell the shares and have no choice in the matter,” said James Connolly, a shareholder and former milk supplier to the plant, and one of the organisers of next Monday’s meeting in the Parkway Hotel Dunmanway at 8.30pm.

“Since 2002, farmers who acted as milk suppliers to Carbery received an annual allocation of shares relative to the quantity of milk they supplied to it,” explained Mr Connolly.

“Now the company wants to forcibly buy back the shares at a price of €1.08.”

He said some of the shareholders affected had planned to pass their shares on to relatives who had taken over the family farm and intended re-entering the milk production industry.

The public meeting, he said, is being organised to outline a strategy to fight the decision.

Barry Collins, another retired farmer and shareholder, said he didn’t want to sell the shares because he feared it would discourage his son from resuming milk production. “I went out of milk production about three years ago and I’ve been asked to surrender my shares at a fixed price.”

Concern has mounted since last November when the affected shareholders received notification of the move. Mr Connolly claimed the shares were worth anything between €3,000 and €10,000 to suppliers.

“There is a democratic right being infringed here.”

However, in a statement, the company said Carbery Group launched a Milk Supply Share scheme in 2012.

The purpose of the scheme was to allow the company to efficiently manage the increased volumes of new milk that would be produced post-2015 when EU quotas go.

It also gave the milk supplier an increased share in the business and a mechanism to realise value for their shares when they ceased milk supply. “Ceased milk suppliers can sell their shares back to the society any time in the three years post ceasing milk supply.

“This gives these shareholders the flexibility as to when they can encash their shares over a three-year period, as share value can go up as well as down.

“The milk supply share scheme has been approved by the board of Carbery and the boards of the four West Cork Coops who represent over 1,400 milk suppliers in the region.”

The company said the proposal to redeem shares from ceased milk suppliers was not a new departure as a pre-existing share supply scheme, introduced in 2002, always reserved the right to redeem shares from ceased milk suppliers.