Merger must deliver top price to dairy farmers — ICMSA

IF the merger of Lakeland Dairies and LacPatrick goes ahead, then the new co-op will have to be the top payer for milk from the country’s leading dairy processors, insisted ICMSA deputy president, Lorcan McCabe.

Mr McCabe said the merger presentations delivered by Lakelands to suppliers indicated that significant savings were possible across the two businesses through rationalisation of services and increased efficiency.

“Our expectation is that the new entity wouldn’t just be among the top milk processors, but would be the top milk processor in terms of price,” said Mr McCabe, who is a Lakelands shareholder.

Should the merger get the green light, it will create the second biggest dairy business in the country with a milk pool of 1.8 billion litres.

“This cannot just be a merger for a merger’s sake. It will create a business with state-of-theart processing facilities, a broader product mix, and a business that is insulated against Brexit,” Mr McCabe said.

“Suppliers will have to see a dividend from this in the shape of a strong milk price,” he added.

This view was shared by IFA president Joe Healy.

“The merger proposal must put the merged entity in the best possible position to optimise dairy processing and pay a strong price to farmers,” Mr Healy said.

“This is particularly critical in the context of Brexit, as both co-ops have farmer members and processing facilities both sides of the border,” he added.

The proposed merger goes to special general meetings of Lakelands and LacPatrick on October 23 and requires over 75pc acceptance to be passed on that day.

An acceptance vote of between 50pc and 75pc in either society’s poll will result in a second ballot a fortnight later, when a straight majority will carry the motion.

If the merger goes ahead, the new business will be called Lakeland Dairies Co-op.

The composite board for the new co-op will include 15 existing Lakeland Dairies board members, and eight from LacPatrick.