Co-operatives from the adjoining counties of Tipperary and Galway have agreed to merger proposals to create a new medium-size player in the dairy industry. The proposals to merge Nenagh Co-Op, in Tipperary North Riding, and Midwest Farmers Co-Op, based at Ballinasloe, Co Galway, will be put before shareholders next month.
The chief executive of Nenagh Co-Op, Mr Jimmy Murphy, is expected to head up the new, amalgamated co-op, to be called Arrabawn.
Following extraordinary general meetings to be held on December 11th, when shareholders vote on the proposal, further general meetings will be held on January 3rd.
The new society would mean restructuring the two co-operatives' butter and milk facilities to maximise economies of scale.
In 1994, the agreement by Midwest to supply Nenagh with skim milk was seen as jeopardising any merger between Midwest and the other western co-ops, North Connacht Farmers (NCF) and Kiltoghert. The two agreed to merge last September, giving a combined turnover of more than £100 million for the combined societies, known as Connacht Gold, which has a 50-million gallon pool. Arrabawn would have a 55-million-gallon pool.
The dairy industry is dominated by Dairygold and Glanbia, both the result of recent mergers, and Golden Vale and Kerry, each of which have milk pools of 150 million gallons or more. With more than 350 million gallons, Glanbia has about one-third of the Irish milk pool.
Falling milk prices and other industry pressures will probably lead to further rationalisation moves for the smaller players in the future.