Shareholders at Fivemiletown Creamery in County Tyrone last night voted with an overwhelming majority in favour of forming a long-term relationship with Glanbia Ingredients Ireland (GIIL).
Almost 50 staff at the creamery are set to be made redundant later this month.
It is believed 83 per cent of shareholders, all of whom are milk producers, voted in favour of the deal.
The agreement, which is subject to the signing of legal documents, involves suppliers of Fivemiletown Creamery entering into a long-term milk supply agreement with GIIL.
It was revealed last week that Glanbia were only interested in the company’s “milk pool”. The milk pool for Fivemiletown is worth around 25 million litres per year which would be a significant addition to the Glanbia portfolio.
However, the News Letter has learned that the sale will include almost the entire Fivemiletown portfolio and that production at the creamery will cease.
As part of the agreement, GIIL will acquire the Fivemiletown cheese brands except for Boilie goat’s cheese which will remain with Fivemiletown.
Fivemiletown Creamery entered negotiations with a number of companies in the summer last year, however, last week Glanbia announced they were in “exclusive negotiations” with the creamery’s management.
It is believed the plant were losing around £1 million per year following the loss of a cheddar cheese supply contract to Kerry Foods in 2012 which accounted for about 60 per cent of their business.
An industry source confirmed that turnover at the company had almost halved to around £11 million and that assets were being eroded on a daily basis.
Fivemiletown will retain ownership of the cheese manufacturing site, and GIIL will form an alliance with Fivemiletown in relation to its retail store, Ballylurgan Hardware, which is currently profitable and has the potential to grow over the coming years.
The management and board of Fivemiletown will enter into consultations with its employees regarding the future of its cheese facility which has experienced difficult trading conditions during the past two years.
The Board of Directors said they regretted the “likely closure of the milk processing plant” in the town and the resulting loss of jobs.
Staff will meet with management later on Friday to discuss their future.