A ROW has erupted between Greencore and the IFA after the company's chief executive said there was "no validity" in the growers' demands for a profit share in the company.
Mr David Dilger, chief executive of Greencore, speaking after the company's annual general meeting in Dublin yesterday, said the Beet and Vegetable Growers Association (BVA), an offshoot of the IFA, looks at the profitability of Greencore "with some envy". But he insisted there was "no validity" in their demands for a profit share.
Greencore is in negotiations with the BVA over the price to be paid for beet this year. The contracts are due to be signed in April and Mr Dilger said these disputes erupted annually.
However, pressure from the growers, who are increasingly concerned about diminished profitability, means the difference of opinion is more public than usual. Mr Dilger said this was "unfortunate".
But Ms Elaine Farrell, secretary of the IFA's beet division, said Greencore only paid the minimum required under EU law and that prices had been static for a number of years.
"They are monopoly processors so the growers have no choice who to sell to."
The growers are paid between £38 to £40 a tonne for beet, related to the amount of sugar harvested. They are looking for a £5 rise per tonne as well as a 10 per cent profit share in Greencore's sugar division.
The IFA president, Mr John Donnelly, said: "With profits in Greencore's sugar division exceeding £24 million in 1995, equating to a 19 per cent profit-margin, growers are justifiably seeking a profit-sharing clause in this year's negotiations to compensate them for the static beet price and increasing input costs."
The sugar division accounted for 29.3 per cent of turnover in 1995 and 53 per cent of the group's operating profits, according to the annual report.
Mr Donnelly called Mr Dilger's suggestion that growers who are shareholders could share in the company's profits "misleading propaganda". He said less than 3 per cent of growers are shareholders.
The company is also in advanced talks with a couple of acquisition targets. Mr Dilger said he was "reasonably confident" acquisitions in Ireland and abroad would be announced this year.
He added that finding companies which offered value was difficult but that there was no effective limit on the amount the company could pay. "It is an open cheque if it boosts shareholder value," he said.
The company has reduced its balance sheet gearing from 61 per cent at September 1992 to 3 per cent at the last year end.
Overall trading was in line with budget and expectations, he told the meeting. "The trading environment is reasonably healthy and we will have another reasonably good trading year.
