Agreement on the new milk supply agreement between Dairygold Co-op and a group of its milk suppliers seems further away than ever this week. The Dairygold Milk Suppliers and Shareholders Group now want the contract held until (a) the whole project is fully reinvestigated and updated and the best return on investment is clearly shown, and (b), until independent milk testing is introduced ‘to enhance trust’.

At a meeting of the DMSSG on Tuesday night, members agreed unanimously to call for a special general meeting of the co-op to discuss their concerns. The request with the required number of signatures is being sent to the co-op secretary with the two resolutions for decision. It’s understood the co-op must convene a meeting within 14 days. 

At their meeting on Tuesday various sticking points with the new contract were discussed. Concern was expressed that signing the contract would mean signing away their rights while the board reserves the right to alter the contents of the agreement from time to time. It is considered by the DMSSG to be “a supply and recapitalisation contract with no minimum price base.” 

They say the expansion plan is based on a survey done in 2011 for milk supply up to 2020 when things were good but they’ve been told that the figures have been confirmed at the one-to-one meetings with suppliers as a required forecast for 2014 and 2015, just two years.

“How can the co-op confirm the figures for 2020 based on just the first two years, especially in light of the fact that quotas will be in operation until 2015?” a spokesperson for DMSS asked this week.

They say they are worried too about the financial requirements of the expansion plan and their contribution to it being a financial burden they say they can ill afford.  They wonder if it’ll be profitable and say they want it fully investigated ‘before and not after’ they invest their money.

A spokesperson for Dairygold said however that the expansion proposals were subjected to detailed investigations and studies followed by consultation with co-op members’ elected representatives before they were brought forward. “Two years work went into it,” the spokesperson said. “The plans were explained at 25 different meetings of members held last October, at area meetings held in December and since at individual meetings with members.”

The spokesperson also said it isn’t true to say that the expansion plan was based on one survey. “Various surveys were done, the latest of which was in 2012 which forecast growth of 63.5% by 2020 over the 2011 level,” he stressed.

The reason why two-year forecasts are being sought, the spokesperson went on to explain, is because the co-op needs to be able to see two years ahead what milk they have coming so that they have in place the necessary processing capacity.

He went on to said that they’ve given a detailed response to the secretary of the DMSSG dealing with all issues they’ve raised and is confident in the robustness of its post quota plan, the integrity of its milk forecasting process, product portfolio, route to market, processing capability, capital investment requirements and funding, “all of which have been benchmarked against best international standards.”

The co-op further says that the Milk Supply Agreement was reviewed by the Arthur Cox firm of solicitors on behalf of milk suppliers and was found by them to be consistent with the rules of the society and not unduly onerous or unreasonable from a milk supplier’s perspective.

The co-op claims that in excess of 70% of suppliers have alredy signed the agreement and a further 15% are in the process of doing so despite a recent media report that claimed nearly half hadn’t yet signed.

The co-op says it will adhere to the rules in relation to the convening of a special general meeting, should such a request be received.