The farm organisation’s comments follow the decision by Kerry Group to explore the potential sale of its milk processing and trading businesses in Ireland and Britain.
Kerry Co-op’s board has agreed in principle to purchase a 60pc share in the milk processing arm of Kerry Group, with the new business potentially being operated as a joint venture involving the Co-op and the PLC.
The purchase of the 60pc share will cost Kerry Co-op around €480m, but the mechanism to fund the deal has yet to be agreed.
However, ICMSA president, Pat McCormack, said the new business model will have to be in a position to meet the existing commitment made by Kerry Group in 2011 to pay a leading price for milk.
“We will be saying very clearly to every party involved that the processing of milk for Kerry suppliers must be placed on a firm financial footing in whatever new entity emerges.
“And the new entity — if there is one — must deliver on the contractual obligations to milk suppliers, including the milk price commitment.
“This commitment was made by Kerry Group in 2011 and it is essential that it is delivered going forward,” Mr McCormack said.

Divisive
The ‘leading milk price’ commitment from Kerry Group has proven extremely divisive and resulted in a prolonged and contentious arbitration process involving Kerry Group and Kerry Co-op.
Mr McCormack also stressed that the protection of Kerry’s milk processing facilities will have to be a fundamental requirement of any new management model.
He said ICMSA had already met with Kerry Co-op, and has sought a meeting with Kerry PLC, to outline its position.
Any future deal will involve the purchase of Kerry Group’s main milk processing and trading facilities at Listowel, Farranfore, Newmarket and Charleville, plus the company’s dairy spreads business at Ossett in West Yorkshire, and its network of local stores.
The business is estimated to have a turnover of €1.03bn and delivers profits of around €75m.
The funding models being floated to date include a mix of debt, revenues from a milk supplier share-up mechanism, and a haircut on the conversion of Kerry Co-op shares into Kerry Group Plc shares.
Kerry Co-op’s 12.3pc shareholding in Kerry Group is valued at nearly €2.5bn.