ONE of four advisory groups in Waterford has again come out strongly against the proposed Pounds 337 million merger between Waterford and Avonmore. It also indicated that it believes it can generate enough support to defeat the merger.

Last night Kilmeaden Advisory Committee (KAC), which represents 180 farmers who supply 8 million gallons of milk and 350 co-op shareholders issued a strongly-worded statement calling on members of Waterford to reject the offer.

The statement comes just four days before the first of two special crucial meetings, which Waterford and Avonmore are holding this Friday. The meetings will be held simultaneously.

The KAC said rejecting the offer would give Waterford Foods the opportunity -to stand back" and review its position in the dairy industry band consider,in a more business-like manner, the opportunities and alternatives available to us".

The organisation, which has two directors on the 35-strong co-op board, Mr Michael Queally and Mr John Fitzgerald, said the problem it had was that the merger is the only proposal which has been put before it. They accused the two companies - Avonmore and Waterford Plc of "pushing the matter ahead with undue haste" and not giving enough time to discuss the matter properly

Both meetings on Friday will require 75 per cent approval from shareholders who attend on the day and who vote. If this is attained, confirmatory meetings will be held by both co-ops on July 25th. However, failure to get 75 per cent approval means that the merger proposal collapses.

The Kilmeaden group said last night that at recent briefings by Waterford and Avonmore, Mr Matt Walsh, Waterford Foods Plc chief executive, said there was "no appetite among the board members at Waterford to reduce (farming shareholding in the plc) to below 50 per cent".

"However this does not answer the question of where the appetite has come from to reduce the holding from the present level of 67 per cent to 55 per cent," it said. "If the Waterford board is prepared to co-operate in a reduction of 12 per cent at this point, who is to say they will not consider the rather smaller reduction of 5 per cent in the future?"

Kilmeaden said it believes the ultimate plan of the "executive management" is, to reduce the co-op shareholding of the plc below 50 per cent and thereby reduce farmer control.

The organisation also criticised the Waterford/Avonmore proposal to give a 3p per gallon premium above the average milk price for the three years following the merger. If you were offered 3p per lb extra for your beef for the next three years from a processor but you had to sell all your beef for the rest of your life to that same processor would you buy it," the group asked.

The Kilmeaden group said alternatives that could be considered include the merger of the two plcs only - with the two co-operative societies retaining their separateness and identity. Another suggestion was a tripartite alliance between Dairygold, Bord Bainne and Waterford Foods, or the consolidation of Waterford Foods as it presently stands.

A spokesman for Waterford plc said the company feels very confident that the merger proposal will be passed on Friday. He said the majority of the co-op board are in favour of it and are recommending it.

He said the Irish Farmers Association, Macra, the Irish Creamery Milk Suppliers Association and the Irish Co-operative Society had all endorsed it.

He said that "on every front the proposal is a good one" and he expected a large turnout of around 1400-1500 people on Friday.