The rationalisation which would follow the proposed Kerry Group plc takeover of Golden Vale plc would seem to be the kind of regional consolidation the Irish Co-Operative Organisation Society (ICOS) favours, according to its director general, Mr John Tyrell.
But Mr Tyrell said yesterday that the ICOS was not taking any particular position on the Kerry offer for Golden Vale. "We have been advocating further consolidation in order to ensure we have a competitive structure and the industry is able to develop and compete internationally," he added.
According to Mr Tyrell, such consolidation needs to be evaluated to assess its benefits and the practical way forward is to look at combining milk processing at regional level.
His view that the milk industry has good prospects is shared by market analysts, who say the Kerry move is highly significant for the Irish dairy industry. "When the plc process began, it seemed Irish dairy processors were biased to invest overseas. Now something unexpected has happened and a leading company in Ireland has become further involved in the Irish milk sector," said one analyst.
Representatives of Golden Vale milk suppliers who are members of the Irish Creamery Milk Suppliers' Association have sent a wish list of conditions to Kerry which, if accepted, will win the suppliers' goodwill. This follows threats that not all the Golden Vale milk pool would necessarily transfer to Kerry.
At a meeting in Co Limerick on Monday night, they added two new conditions - criteria for an index-linked milk price for six years and the retention of the Golden Vale penalty system - to the three conditions they already had announced. These were independent milk testing, the retention of the surplus to quota milk in Golden Vale for small producers and a price comparable to that paid by the neighbouring Dairygold Co-Operative.
The Irish Farmers' Association will hold a meeting of farmers in Ennis, Co Clare, tomorrow night and has sought a meeting with Kerry management, as has the ICMSA, before the end of this week.
