Farmers are seeking talks over the future of Ireland's malting barley industry after French co-operative Axereal bought the malt division of Ireland-based Greencore in a E116m deal.

John Bryan, the president of the Irish Farmers' Association, is to demand "early" talks with both Axereal and Greencore over guaranteeing business to existing growers.

He also urged Diageo, the drinks maker behind Guinness which buys the bulk of Greencore Malt's, to "give a commitment" to support growers.

"Malting growers' contracts must be guaranteed into the future," Mr Bryan said, adding that he welcomed initial reassurances from Dominique Bamas, Axereal's chief executive, that the co-operative would support Irish farmers.

Global league

The call followed Axereal's purchase of Greencore Malt for up to E116.25m to merge with Boortmalt Group, the malt business the co-operative bought six years ago.

The deal will take Boortmalt's malt capacity to more than 1.1m tonnes and promote it to fifth in the sector's global rankings, overtaking two Chinese producers, Supertime and Cofco.

Boortmalt will remain behind French rival Groupe Soufflet, which was earlier linked to a Greencore deal, and GrainCorp, the Australian grain handler which last year paid $655m for United Malt Holdings, an international aggregation of malting assets.

'Influential players' 

Mr Bamas said that the deal would develop a strategy by Axereal of expanding in "quality downstream grain businesses" to process cereals into higher-value products.

"We seek to build strong positions for each of our processing businesses to create influential players on a global stage," Mr Bamas said.

Boortmalt will, with the purchase of Greencore's Belgian, Irish and UK plants, boast 11 factories in seven European countries.

'Large' profit margin

Greencore said its decision to exit malt reflected both a need to raise cash to invest in its expansion in US and UK convenience foods and the likelihood of profits  falling to "more normalised levels" after a period where they had been boosted by capacity reductions.

"They have always been shy about what they make in malt. Now we know why," an Irish agriculture insider told Agrimoney.com.

"That's nearly a 10% margin. Normally we would expect at most 7-8%."

Greencore shares closed down 0.38% at E1.325 in Dublin.