The Formation of Kerry Co-operative

In 1973 Ireland joined the European Economic Community (EEC) and this accelerated the merger of many small dairies in Ireland so as to be able to compete with the larger milk companies in the existing EEC. Kerry followed suit and with an injection of capital from milk suppliers in the County it acquired the State owned milk processing company and its creameries, together with its 42.5% stake in the private NKMP company for a consideration of €1.5 million. Furthermore, six of the eight independent Co-ops, which held the other 42.5%, were acquired and accordingly the private company became a subsidiary of the newly formed Kerry Co-operative Creameries Ltd (Kerry Co-op) which began trading in January 1974. Thus Kerry started out as the smallest of Ireland's six major agricultural Co-operatives in 1974, with sales in that year of €29 million.

In the period 1974 - 1979 Kerry expanded its milk business in a similar fashion to other dairy Co-ops but did so on a consistently profitable basis, which of course was not always typical of the traditional dairy Co-op sector. EEC entry had brought better milk prices, increased milk volumes and improved farm incomes in Ireland. Kerry Co-op grew organically simply by taking the milk that came its way, processing it and meeting all other farmer requirements in terms of inputs and on-farm services. Its milk supply increased from 67 million gallons in 1974 to 87 million gallons in 1978. The new Co-op acquired the independent Killarney, Limerick and Ballinahina Dairies (Cork) which later became part of Kerry’s Dawn Dairies structure with the addition of Galway and Moate Dairies.

However in 1979 everything changed for Kerry Co-op when the county was chosen as a pilot area for a bovine disease eradication scheme. Allied to this, milk production was further depressed due to wet summer weather in 1979 and in 1980, which meant that Kerry lost almost 20% of its milk supply. This was highly significant in that it happened at a time when the Co-op was in the course of completing a €18 million capital expenditure programme at the NKMP plant in Listowel.