IRISH MILK processor the Kerry Group has rejected farmer demands for a return to flat rate pricing for drinking milk supplies.

The call came from Irish Farmers‘ Association liquid milk chairman Donal Kelleher, who described the sudden change as “an outrageous attack on family farm incomes”.

“The new system bases the previously flat liquid price on constituents and links it to the more volatile manufacturing milk price,” he said.

“Although their milk is being sold on the highly profitable liquid milk market, suppliers will be subjected to the vagaries of the export dairy market.”

Mr Kelleher claimed that losses would range from 9.5c/gal (1.4p/litre) to 14c/gal (2.1p/litre), or €7000 (£4760) to €17,000 (£11,560) overall.

But Kerry Group communications director Frank Hayes said the changes were necessary for the group to hold its market share in the face of fiercer competition.