Brendan Kenneally (Fianna Fail)

I thank the Cathaoirleach for allowing me to raise this matter on the Adjournment. I welcome the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, to the House. The matter I wish to raise concerns the decision made by Glanbia to close the cheese factory at Kilmeaden in County Waterford. This is a very short-sighted decision on Glanbia's part. Although time will tell, I believe it will not benefit the company at all. The cheese factory is in a rural area. We are all doing what we can to keep people in rural areas and provide them with employment, yet the factory, which is a rural-based company, is closing down.

The factory has an excellent workforce and the employees work on a seasonal basis, for six or seven months per year. They have acquired considerable expertise over many years. The milk coming in from local farmers is of the highest quality. To a certain extent, this market will be lost.

By and large, most organisations do what their members want them to do. Unfortunately that is not the case in respect of the Kilmeaden plant. On 17 May, the annual general meeting of the Glanbia co-operative society was held and a motion of no confidence in the board of directors was tabled and carried. In most organisations the board would get the message in such circumstances. I believe a similar motion was carried in Dairygold and the board resigned. However, the directors in the case in question have decided to hang on. They have their own agenda and are not doing what their members want them to do.

The 23 million gallons of milk which have been going to the factory in Kilmeaden for many years will be transported by road to Ballyragget in County Kilkenny, a distance of approximately 50 miles over some of the worst roads in Ireland. The journey will take the tankers through both Kilkenny and Waterford cities and the road between Waterford and Kilkenny is the worst stretch of national primary road in the country. This long journey will have an effect on the milk and will also have long-term effects for farmers who are not currently charged for the collection of their milk and its delivery to the local creamery. They will not be charged for their milk to be taken to Ballyragget but I question how long this will be the case. It would seem inevitable that bigger tankers will be required and these may be forced to travel outside working hours and collect milk at unsociable hours.

The reasons for the sale seem to be the existence of a large debt and the value of the site. The cheese factory is on a large site and I suggest the cheese factory be retained while the land could be sold.

The cheese manufactured in Kilmeaden is a unique product which has won many awards, including awards at the Norwich international show, the Royal Bath and West County show, Ireland International cheese awards, the Royal Dublin Society Spring Show, British cheese awards, London international cheese and dairy competition and a gold and bronze medal at the world cheese awards.

We are in danger of losing this unique product. Milk varies according to the quality of the grass. This cheese cannot be produced to the same standard at another location. Milk is churned about when it is being transported long distances and its quality will suffer. I fear the new plant will not be properly regulated and not have adequate quality control for the large volume of milk. Kilmeaden has up-to-date laboratory facilities and expertise.

The management has stated that a saving of €2 million will accrue from this measure but it also states that the costs for transporting the milk to Ballyragget will be an extra €1.6 million, meaning this decision will result in a saving of €400,000. It is sacrificing a world-renowned brand for the sake of €400,000. I contend the company will be unable to reproduce this product with a resultant drop in sales and profits.

Transport costs will be greater than has been estimated by the company. The tankers are currently undertaking four daily runs. It will take approximately two hours to travel each way to north Kilkenny and allowance must be made for the tankers to be cleaned, giving a total of five or six hours. The tanker drivers will be required to use a tachograph and will not be permitted to drive beyond a certain length of time. This will be an additional cost. The company believes it can do the job with an extra four tankers on the road but I contend this is not possible. The costs to the company will be greater than any savings and it is jeopardising a world-renowned brand because of a short-sighted attitude to debt reduction. I suggest it could reduce the debt by selling part of the landbank at Kilmeaden. I ask the company to reconsider the decision to close the cheese factory.