AHEAD of today’s Kerry Co-op AGM, Clare dairy farmers who supply their milk to Kerry have expressed concerns about the proposed Share Redemption scheme.
The current board of Kerry Co-op want to bring in this scheme to give cash back to shareholders who surrender their shares.
They say it will help the Co-op achieve section 701 status – a valuable tax relief that would allow a ‘spin-out’ of Kerry Group plc. shares.
These shares have increased in value substantially over the last few years driven by the Tralee based company’s growth abroad in Food Ingredients.
Many Clare dairy farmers who send their milk to Kerry Group plc have shares in both Kerry Co-op and Kerry Group plc.
Cooraclare farmer PJ McGuane, who well known in Co-op and GAA circles, says that as the proposed share scheme seems to be in place already and that there is no point in going to Tralee to vote for rule changes.
“Mundy Hayes, the chairman of Kerry Co-op said in the Farmers Journal that the scheme is going ahead regardless of the vote,” he said.
“I have no problem with the people who voluntarily applied getting their money.
“But the people who didn’t apply want their Kerry Group plc. shares spun out in full.
“That is what we are asking for since 2016.
“The current board should have a plan for that or at least they should be able to say when they will have a plan,” added Mr McGuane
Former Kerry Co-op director Pat Minogue from Scariff, says the proposed scheme is taking money off farmers, not giving it to them.
He says five per cent of their holding is going to be used by Kerry Co-op to develop a new business – but the current board won’t give any details of how the money will be spent.
He added that the board are taking five per cent of everyone’s holding regardless of whether they apply for the scheme or not.
According to Pat, farmers whom this scheme doesn’t suit for tax reasons are under the impression that the scheme won’t have any effect on them if they don’t apply for it.
But he says the current board are talking about creating a fund of over €80 million for new ventures.
“To come up with this money, they have to dip into every member’s holding. That has not been made clear,” he said.
Pat was on the board of both Kerry Co-op and Kerry Group plc.
He says that Kerry Group plc management are no longer involved in the Co-op.
“The link was broken by the Co-op board in 2016.
“There are several issues that are not resolved around shares.
“This scheme won’t help and it won’t bring back section 701 status.
“Everyone should get the full value of their holding,” added Mr Minogue
The Kerry Co-op AGM takes place at 12pm in the Brandon Hotel, Tralee on Wednesday, June 19.