From the Experts

MG pays ultimate price for poor decisions

By Dairy News

Some Murray Goulburn suppliers felt ‘ambushed’ on the day of the co-operative’s AGM.

They were travelling to Melbourne to hear the latest information from the board of their beleaguered co-op, only to learn that the decision had been made.

All were shocked. Some were angry and others resigned to their fate. The revelation that 90 per cent supplier-shareholder approval wasn’t required by the board meant the co-op and all it once stood for was finished.

“A lot of us feel like this (decision) was dropped on us today,” one supplier said, receiving applause from the room. “Left in the dark again,” said another.

Murray Goulburn director Craig Dwyer addressed the room to explain why the decision was made.

Essentially, there was no other option, he said.

Dwyer had met with (then) deputy PM Barnaby Joyce and told the audience at the AGM: “The outcomes of that conversation were that it is not an industry problem but an MG one.”

Bad business decisions have seen the demise of the once proud co-op, gobbled up by one of the world’s largest dairy businesses in Saputo.

What makes it more galling for many suppliers is that others companies are identifying opportunities to grow and seizing on them.

Saputo has purchased MG for the same reason it bought WCB in 2014 — to take advantage of the opportunities in Asia, right next door.

Fonterra is also investing in Australia to help it secure its foothold in cheese exports, also to Asia.

And on a smaller scale, two companies, Freedom Foods and ACM, are investing millions in Victoria to expand.

So while opportunities in the industry remain, it’s genuinely sad to see that an Australian co-operative won’t have the opportunity to capitalise.

The world moves on and it’s to be hoped that the competition at company level for milk translates into competitive prices for those producing it.