Around 70 milk suppliers attended a meeting held by Munster Dairy Producers Organisation (MDPO) in Co. Kerry last night (Tuesday, May 19) to voice their concerns over the new Kinisla milk contract.

Kinisla, the new name for Kerry Dairy Ireland (KDI), was officially unveiled at an event in Listowel on Monday (May 18).

In December 2024, shareholders in both Kerry Group and Kerry Co-op voted to approve a €500 million deal for the co-op to acquire Kerry Group's dairy business, Kerry Dairy Ireland.

Kerry Co-op currently has a 70% stake in Kinisla, with the remaining 30% held by Kerry Group.

Contract

A new contract was revealed to milk suppliers in April, replacing the previous contract, which expired on April 30.

KDI previously told Agriland that the contract issued to farmers is "final and balanced", and comes with a deadline of August 4 for completion by the supplier.

James Doyle, chair of MDPO, has branded the contract as "one-sided" and claimed there is nothing in it for milk suppliers other than that their milk will be collected.

He told the meeting at the Rose Hotel in Tralee that he has written twice to Pat Murphy, chief executive of Kinisla (formerly KDI), seeking to negotiate the contract.

"We’re still waiting for the invitation to negotiate this contract with KDI, but there’s still plenty of time to do that. We aren’t in any rush. This contract needs to be negotiated," he said.

Doyle again highlighted concerns MDPO has about the new contract, including audit rules, how base milk price will be determined and milk grading standards.

"If I was chief executive of that or if I was on that board, the one crowd of people that I’d want with me are the people that are producing the 1.2 billion litres of milk, because that is our milk ladies and gentlemen and no one can say it isn’t.

"That is the only tool you have and the only tool that’s left to you,” he said.

"I’m not saying that anyone shouldn’t sign a contract, I’m saying this one shouldn’t be signed in its present form," Doyle added.

Doyle suggested that the former contract between Kerry Group and the milk suppliers should be revised and used instead of the new contract.

"My recommendation is that we put a 12-month rolling contract in place.

"If this board that are in charge of this outfit treat milk suppliers fair, pay them a proper price for their milk, we’ll have no problem going forward recommending milk suppliers to keep rolling that contract forward for five years," he said.

When one supplier asked if MDPO would explore the option of finding a new buyer for its members’ milk, Doyle said:

"Whether there is some other one out there that is looking for milk or not, but our business at the moment is this contract is in front of us and we have to negotiate on behalf of our members and all milk suppliers.

"That is what we intend doing and that failing us, we’ll take it from there after that."

Meeting

There were some heated exchanges between milk suppliers and some members of the Kinisla board who were in attendance.

Conor Creedon, vice chair of Kinisla, told the meeting "the negotiation of the contract went through the proper channels".

"It was brought to the KDI board, the KDI board reviewed it, made changes to it and brought it to the Kerry Co-op board on more than one occasion.

"The Kerry Co-op board reviewed it, made changes to it and carried it to the advisories. So it went through the proper channels. There is nothing in that contract that anyone should be afraid of," he said.

However, James Doyle claimed “you cannot negotiate a contract with yourself, there has to be two parties involved”.

Many farmers in the room called for the removal of the August 4 deadline.

In response, Creedon pointed to the €300 million investment announced by Kinisla this week.

"That’s going to move a lot of milk into value added products that’s going to deliver a much better price.

"That’s a commitment from the board and from Kinisla in general, so we’re looking for a commitment from the suppliers that we will get the milk for the next four-and-a-half years.

"If people don’t want to give that commitment, that’s fair enough but do you think they should be piggybacking then on the people that do give the commitment? Lots of people are giving that commitment already," he said.

MDPO

When asked if Kinisla would engage in negotiations with MDPO, Creedon said: "We will report back to the board from the meeting, but three of us here cannot take any decision for a board".

The MDPO held a similar meeting for milk suppliers on May 7 in Limerick and is planning another meeting in Clare next week.

KDI (now Kinisla) previously said it is "actively engaging" with suppliers throughout the process, adding that one-to-one "clinics" have been held across its branch network.

"Any supplier who has questions or concerns can avail of that service or arrange to meet their area manager directly," it added.