Kilmeaden puts alternatives to merger plans for Waterford

An alliance between Dairygold and Waterford Foods is among a set of alternatives to the merger of Avonmore and Waterford Co-Ops, proposed by the Kilmeaden Advisory Committee. According to the group, which is the main opposition to the deal among Waterford members, the proposed merger is "not in the best possible long term interest of beet, dairy, grain or pig farmer shareholders".

The merger is likely to receive second and final approval from both sets of coop shareholders at special meetings this Friday.

Apart from the Dairygold proposal, which the committee says should "be pursued", the group suggests a merger of Waterford and Avonmore plcs, but not the co-ops.

According to a spokesman, Mr Anthony Betts, a precedent exists for this within Avonmore Foods, in the case of Mullinahone CoOp, which "retains its own identity", even though it is a corporate member of Avonmore plc. Another proposed alternative is a deal between Avonmore, Golden Vale, Dairygold and Waterford to "process and handle" the Munster milk supply.

"The plc concept could be used to establish such a venture, but each co-op would retain its own identity," said Mr Betts.

The final alternative put forward is a "consolidation of Waterford Foods plc as it stands with the possible disposal of certain assets to bring the balance sheet into line".

The committee says it has "no evidence to suggest that Waterford Foods plc management has seriously looked at any of these alternatives".

The group has called on shareholders to vote against the merger at this Friday's second and final special meeting.

"This is a merger dominated by Avonmore, in effect, a takeover, the benefits shareholders will receive from the share spin-out are simply a case of you getting your own money back out of Waterford Co-Op," said Mr Betts.

"The executive management of Waterford Foods are willing to discuss any farming issue except the one core issue of reducing farmer control from 67 per cent to 55 per cent," he added

Meanwhile, the ICMSA has said it hopes Friday's vote is "unanimous" as the new company will not need diversion from "its prime objective of being the most cost efficient processor in the country". A spokesman for Avonmore Foods described a claim on Monday from ISME that a number of suppliers had been "unilaterally de-listed" by the company on account of the merger as "utterly baseless". He said the de-listing of some suppliers was part of the normal annual review by the company and "had nothing to do with the merger at all".