Milk producer Arrabawn has said redundancy packages will be available for some staff at its Kilconnell plant in Galway following a decision to sell its liquid milk sales book to Sligo-based agribusiness Aurivo.
The production site near Ballinasloe in Galway, which employees 110 people, is not included in the sale agreement.
Approximately half of the workforce, mostly sales employees, will transfer with the sale of the business, but inevitable concerns have arisen about the future of the rest once production ceases in the middle of 2023.
Speaking on RTE News on Friday, chief executive Conor Ryan said management would work to see if employees could move to other parts of the business.
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“We have a number of retail businesses, we have a factory in Nenagh. Some guys it might suit and hopefully we will be able to accommodate any of them that wish,” he said.
“And [for] some of them there will be redundancy packages available.”
In a separate statement, Arrabawn said it was looking at options for alternative use of the plant.
The sale agreement was announced on Friday following decision to sell taken by the board of directors, which will require due diligence and approval from the Competition Authority.
Subject to the sale going ahead, it is anticipated that processing at the plant will cease sometime around mid-2023.
“Milk supply and upcoming liquid milk contracts will not be impacted by this decision,” the company said.
“Arrabawn’s priority is to support all employees and suppliers during the transition. A consultation process is underway with staff to ensure all necessary supports are being provided during the transition.”
The Irish Co-operative Organisation Society (ICOS), welcomed the move.
Its president James O’Donnell commended the “courage” of both organisations in agreeing a “historic” strategic move to rationalise the domestic liquid milk business.
“I believe this move will prove to be a positive one for liquid milk suppliers across the region and nationally. It will allow Aurivo to achieve even greater scale and reach in their consumer food business,” he said.
“It will also allow Arrabawn the opportunity to focus on their core manufacturing business which has been transformed in recent times, particularly with the recent investment of €30m in the Nenagh plant.”
However, Irish Farmers’ Association Liquid Milk Chair Keith O’Boyle described Arrabawn deciding to exit the business as “a serious indictment of the liquid milk sector”.
“IFA has been highlighting the precarious situation of the liquid milk business for the last number of years and this is now playing out with Arrabawn leaving the sector,” he said.
“We cannot have a situation where any other processor or farmer feels forced to leave the liquid milk sector. The only way to guarantee this is by retailers paying a fair price for fresh milk. If this doesn’t transpire, a regular supply of fresh milk on supermarket shelves is in real jeopardy.”
Fine Gael Roscommon-Galway Senator Aisling Dolan said staff “must have their jobs secured”.
“Processing and distribution of liquid milk products takes place here and it is a major source of employment with 110 working here affected by this decision,” said Ms Dolan.
“They, their families and also, the local suppliers rely heavily on this facility. Facing into an uncertain winter with this news is the worst possible development for all in east Galway. It is a major shock.”
