Gren­nans top Glan­bia in fixed-milk price bat­tle

Feed mer­chant re­ports farmer in­ter­est in its ‘loy­alty scheme’

Irish Independent - Farming - - NEWS - LOUISE HO­GAN

FEED mer­chants Gren­nans has stated there is in­ter­est in its fixed-milk price scheme as it coun­ter­acted the move by Glan­bia to link feed pur­chases to a €30/t ‘loy­alty scheme’.

The move by milk pro­ces­sor Glan­bia has drawn the ire of feed mer­chants around the coun­try.

Gren­nans has re­sponded by top­ping Glan­bia’s of­fer of 31c/l. It is of­fer­ing a five-year fixed 31.5c/l base milk price — in­clud­ing VAT, on 3.3pc pro­tein and 3.6pc but­ter­fat —to its cus­tomers who are Glan­bia sup­pli­ers.

John Gren­nan claimed Glan­bia is us­ing co-op share­holder funds to cre­ate a “war chest” for Glan­bia Ire­land to get cheaper milk and try un­der­cut feed mer­chants on the value they are of­fer­ing.

“With­out the top up from the share­holder funds, their price is very weak on milk,” he said.

The milk will still be sup­plied to Glan­bia, but Gren­nans is pledg­ing that if the av­er­age base price paid for milk by Glan­bia over the five-year term dips be­low the fixed price, it will pay the dif­fer­ence for the vol­ume fixed.

How­ever, farm­ers will be re­quired to pay the feed mer­chant the dif­fer­ence if it sur­passed the fixed price.

Gren­nans said there will be “lim­ited quan­ti­ties” and it will ap­ply to a max­i­mum of 20pc of a cus­tomers an­nual milk out­put.

Glan­bia stated it would not be pro­vid­ing the fig­ures on the ex­act num­ber of farm­ers sign­ing up to the fixed-milk and feed -price scheme.

How­ever, the milk pro­ces­sor stated that 25,000t of feed was avail­able through the scheme and it was over­sub­scribed.

Ap­pli­ca­tions sub­mit­ted by the Oc­to­ber 18 dead­line will now be an­a­lysed and dis­trib­uted.

Glan­bia de­clined to com­ment on the Gren­nans’ of­fer.

It has stated that the €30/t feed ‘re­ward’ is com­ing from Glan­bia Ire­land re­sources.

“Glan­bia Ire­land is very grate­ful to its share­hold­ers and cus­tomers for their loy­alty and sup­port for mak­ing the busi­ness a suc­cess since its for­ma­tion in July. Glan­bia Ire­land is ma­jor­ity owned by Glan­bia farm­ers through Glan­bia Coop,” a Glan­bia spokesman said.

Jimmy Brett from the Brett Group con­firmed it would not be fol­low­ing Gren­nans’ lead.

“We’ve seen the of­fer by Gren­nans —it’s a very brave of­fer from a pri­vate mer­chant, and the com­pany needs to be com­mended for it. It puts some per­spec­tive on what a long- term milk price could be,” Mr Brett said.

He would not be drawn on Glan­bia’s scheme how­ever.

“We don’t be­lieve in mar­ket­ing gim­micks, nor do we be­lieve in giv­ing farm­ers back their own money pack­aged as dis­counts,” Mr Brett stated.

Lif­fey Mills Pat Ryan said: “Glan­bia are re­mov­ing com­pe­ti­tion and choice for the farmer. A healthy mar­ket­place is where ev­ery­one is com­pet­ing on a level play­ing pitch.”

Glan­bia had run scheme in­for­ma­tion meet­ings na­tion­ally as it tried to con­vince farm­ers to sign up.

How­ever, many raised con­cerns about agree­ing to pur­chase feed at an un­known price over five years.

Glan­bia moved to al­low sup­pli­ers opt out of the feed el­e­ment af­ter two years with­out penalty.

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