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End of the line looms for our biggest creamery

Raymond Domer and Anna Kennedy inspect the cheese as it is mixing   SH33

 

THE future of one of our best known agribusinesses is looking to be in increasing jeopardy.

Fivemiletown Creamery, which, over the years has produced award-winning butter and cheeses has, been in financial difficulty for some time, and tomorrow its 35 shareholders will met to decide on a buy-out offer from Glanbia, Ireland’s biggest milk processor.

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The deal does not bode well for the company’s 50 employees for, as well as offering to take over supplies from the co-op’s 50 milk producers, Glanbia wants to transfer all of the cheese production out of Fivemiletown, leaving behind the goat’s milk cheese, Bolie.

Should that happen, this will only provide employment for a few, if any.

The company’s troubles began two years ago when it lost a major contract with Kerry Foods (who have a major manufacturing plant in Enniskillen) for the supply of cheese curds.

And, it was the inability to replace that contract, allied to the loss of milk suppliers to other processors, that forced shareholders to consider approaching Glanbia and others.

It is thought that the Glanbia offer was considered the best.

It will collect the milk from the 50 suppliers for five years and, take over the speciality cheeses.

Ironically, cheese sales accounted for only five per cent or £500,000 a year, of turnover.

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But, their proven track record (Harrods are among customers), and the lure of 25 million litres of milk a year proved irresistible to Glanbia (GIIL).

This week, the company said it had entered into exclusive discussions with a view to forming a long-term relationship between the two organisations.

“Under this agreement, Fivemiletown will enter into consultations with its employees regarding the future of its cheese facility, and will enter into a long-term milk supply agreement with GIIL.

“GIIL will perform milk collection and testing on behalf of Fivemiletown as well as providing an advisory service to its suppliers.

“As part of the transaction, GIIL will have an exclusive licence over the retail cheese brands, except for Boilie which will remain with Fivemiletown.”

The statement said this ‘strategic alliance’ is subject to the approval of Fivemiletown shareholders and the Board of GIIL.

“Both parties see considerable value in establishing a long term, mutually beneficial alliance”, it added.

In its statement, Fivemiletown confirmed it is involved in advanced negotiations with Glanbia on the future of its business.

A spokesman said the co-operative has experienced difficult trading conditions, particularly in its core cheddar cheese business, in recent years, and that this had significantly impacted on the financial viability of the business.

At the end of the day, the buy-out offer means the future of 50 milk suppliers is secure, but not the jobs of those in the cheese-making department.

As one source put it: “If these proposals are accepted, I don’t think at this stage anybody can keep that place open.”

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