Kerry Co Op Shares

2019 is like a lifetime ago now… Kerry were just about able to cope with the surge in production post 2015 upto 2020.. since then milk deliveries are in decline and are only going one way for the foreseeable future.. if the NTS lads approached Kerry now.. Pat Murphy etc would no doubt be interested…

our parlour man was here the other day and we discussed what we knew of this deal… he reckons from his travels all over Kerry servicing and repairing parlours that while Kerry have 2600 suppliers now… in 10-15 years time it will be less than a 1000 suppliers… so i think the producer group has a future

thank god , people are starting to see sense at last , others need to know this message ,

It’s a hang job for the milk suppliers

To set a few things straight in this thread:

JV Profits and Management: The dairy business that we are buying a 70% stake in has profits of around €70m. Kerry PLC management will continue in their current jobs so I want to guarantee you that there will be professionals running the JV.

@Castlekeeper: As you made it clear you want to sell your shares once getting them so a liquidation would suit you best. But let’s be realistic—liquidation hands a third of those shares to the taxman. Most shareholders prefer an option that avoids that tax burden entirely. While I’m nearly in favor of liquidation myself, I’m practical enough to know it’s not what the majority wants, especially since the current option on the table lets shareholders pass on shares to their kids with zero tax under any basic estate planning.

@KerryCow: Yes, I get you’re upset over the 5.4c/L payment as you won’t get the top up for most of your own milk. In my personal opinion it is wrong and unfair, I’m fully on your side about it. But going back to arbitration won’t help you here, and you know why? The very people who are now pushing the producer group signed off on our current contract where it’s written down in black and white: Kerry only has to pay for your quota milk plus 20%. You can argue all day, but legally, that’s what it is. Kerry may still buy extra milk, but they aren’t obliged to.

The Bottom Line: Some of you clearly prefer wishful thinking over facts. But cold, hard facts won’t change just because you don’t like them. If it truly is a “hang job” for milk suppliers, it’s those co-op board members that signed off on our milk contracts in 2011 that put some of you in the noose.

There’s some people out there who sold all their own shares and had a great time doing “the big fella” with the money and they’re doing their best now to stop this JV. All they remind me of is the story of “the fox with no tail”.

I know ftm would rather a liquidation , that what you proposed at all the meetings over the last number of years at every meeting , but you have come up against a wall in kerry co op , and you have now resigned yourself to the conclusion that this is the next best deal for you ,

Totally understandable .
and yes I am a disappointed that I am not get a top up on all my milk supplied , but if that’s the way , so be it .
kerry plc have used us before for there advantage and are trying to do it again .
business is business ,

And ftm I don’t believe people are trying to block anyone from getting their shares out by jealousy .

I know you have a massive windfall coming and best of luck to you , sometimes it’s the little fellow next door that’s the problem , the successful people and the big fella generally are not .

I look up to progressive people and learn from them.
and hard work should also be acknowledged

in fairness having read that post that makes the deal sound like a good one… problem is guys on the fringes of Kerry catchment area will have NO loyalty to Kerry and will not want to pay anything towards JV and they will pull the plug once 2026 comes around if not before then… and if Kerry are only obliged to buy there quota + 20% and if those suppliers are producing well over that amount whats to stop them sending that extra milk else where…

the deal wont affect farmers too much over the next 5 years and maybe 10 years but after that who knows… apparently 25million will be used to reinvest in the business annually.. with inflation that figure will rise and rise.. with suppliers leaving to other co-ops and lads pulling the plug due to age/illness etc.. and derogation being pulled which will happen for sure… all those factors mean the milk pool will shrink and could shrink quite dramatically… what then…?

tis no wonder the PLC want out…

The thing I cant get is that milk supplies are not entitled to shares in the CoOp base on their financial contribution of 5 cents per litre over 5 years. After all the business is goosed without milk suppliers. I would assume if any suppliers move to another milk purchaser they will have to share up also but at least they will get shares for their investment. I think it is a big mistake not to try to keep milk suppliers sweet and hold onto those that have options to switch to other processors. If some suppliers leave it will start a downward spiral the it will be impossible to stop.

I would imagine they will try to get lads to sign up to long term supplier contracts like last time. I for one wont be signing one of those. One burned and all that.

I thought the coop wanted to be rid of non-milk suppliers and C shareholders and that was one of the aims of the redemption scheme. Now they are happy to use their money to fund a new venture instead of letting them cash out fully. I'd imagine most B and C shareholders would rather not be contributing to it, why would they want to? They are being held to ransom, the coop are basically dipping into the pockets of those shareholders to buy a business for the milk suppliers. They already have held back millions in dividends over the years, they've already taken from those shareholders and now a 15% haircut. For any C shareholder who hung on over the past few years for this, I don't see it as such a good deal. They could have offered any non-supplier the latest value of the shares (1 coop = 6.12 PLC) as an option to cash out and given an option to invest in new venture if they wished. Remember the coop have a poor track record on investments. If I had a choice I'd rather have all my money out now.

I would be I wouldn’t be confident in my ability to convey the message .
and to be honest , I will supply my milk to a new buyer and I won’t be shoring up anything to anyone ,

There will be demand once the dust settles ,

If this does go through, do the coop have to sell all of its milk to the plc? Or how is that working?

Castlekeeper… the point you’re attempting to make is so ridiculous I didn’t deem it worthy of a reply initially.

As things stand you can inherit a co op share the same as a plc share, however to extract any value from the co op share you’d then have to sell it on the grey market to a pension fund for €400 or else pay income tax on it. Also, you seem keen on liquidation per some of your posts. That needs 75% of the A shareholders. You’ll never ever get that