News

Don’t jeopardise sale: Farmers

By Rick Bayne

Western Victorian dairy farmers and Murray Goulburn suppliers have spoken out against the ACCC’s concerns over Saptuo’s proposed ownership of the Koroit plant, saying they don’t want the sale jeopardised.

Winslow farmer and Murray Goulburn suppler Bernie Free said he couldn’t understand the ACCC’s concern about Koroit.

“I believe the ACCC is being gutless because Western Victoria would be no different to the rest of Victoria,” Mr Free said.

“If Saputo took over Murray Goulburn it would just put Western Victoria is the same boat; Northern Victoria and Gippsland only have two major suppliers.”

Mr Free said he would have preferred Murray Goulburn to remain a co-operative but realised that was no longer possible.

“I don’t support the sale but there aren’t too many options considering the position we’re in,” he said.

“Sadly it’s too late now to stay as a co-operative. We should have been harassing our directors more and earlier but we thought what we were hearing was right, but it wasn’t.”

Mr Free said he believed there would still be strong competition in Western Victoria if Saputo took over MG.

“Fonterra is spending a heap of money to make Cobden bigger, and another possibility is that Bega could get a stake in Warrnambool Cheese and Butter to get around the problem.

“The ACCC might be doing this as an attempt to make sure Murray Goulburn isn’t sold overseas but there might be no other options.”

Koroit dairy farmer and former MG site manager Tom Paton said Koroit and Cobram were the two main MG factories. “The ACCC is too far behind and should have stepped in a lot earlier. They’ve left it too late. It’s another thing in a long line of mistakes.”

Mr Paton said Koroit should continue to operate with one million litres of milk and make product to suit the market and be able to pay farmers over $6.

Woolsthorpe farmer Brian McLaren has personally called the ACCC to protest against the commission’s statement.

“They haven’t done their homework in regards the dairy industry,” Mr McLaren said. “Their press release has an impact on everyone associated with Murray Goulburn.”

“We’d still have four players in this area if Murray Goulburn goes. How much competition do you need?

“I’ve been a dairy farmer all my life and if they sell the Koroit factory to someone other than Saputo my share portfolio will go down the drain. If they don’t let Koroit go to Saputo, would another buyer pay for my shares?

Mr McLaren disputed the ACCC concerns about milk price. “They ask what about the milk price in five to 10 years; I’ve been battling with the milk price for 40 years.

“Murray Goulburn can’t stay but there aren’t many other options around. Let’s get it done and dusted.”

The concern is being felt further afield. Northern Victorian farmer Gemma Monk said that as an MG supplier she hoped the deal goes through.

“It would be disastrous for me personally and for other MG suppliers and I think the whole industry would be far worse off if it was to fall over,” she said.

Ms Monk feared that blocking the sale because of Koroit could have severe ramifications for the industry if another buying wasn’t found.

“I wouldn’t see the industry recovering too quickly from it,” she said. “If there is one less player there’s potential for those remaining to say we’ll pay less. It’s a greater risk for pushing milk prices down than if Saputo does take over MG.”

“The ACCC says they’re worried about taking over Koroit because it may influence price in the south-west but the price Fonterra and every other milk company pays in the south-west is the same cents per litre as they pay for the whole southern milk pool. It’s not on its own little payment program. I don’t see that argument as being valid.”

Ms Monk added that plans by the Midfield Group to set up a processing facility invalidated the ACCC argument about competition. “I feel the ACCC probably don’t have their heads as far around the dairy industry as they should have,” she said.

Retired dairy farmer and current Moyne Shire councillor, Jim Doukas, said Koroit was the “jewel in the crown” of MG. “If anyone is going to buy Murray Goulburn they’ll look at Koroit first,” Cr Doukas said.

Cr Doukas said Koroit needed a vibrant milk processor and he was concerned about the impact of delays on farmers worried about their future. “The longer it drags on the harder it is on farmers supplying Murray Goulburn,” he said.

Cr Doukas said the ACCC assessment was based on cream, butter and cheese but there was more to the Koroit plant, and he didn’t agree that competition would be cut.

“Fonterra does have capacity to take more milk at Dennington and they’re adding an extension on in Cobden. They’re big enough to crank up to take on Saputo.”

“We need to look at all the options and be open about them.”