Saputo demands loyalty

By Stephen Cooke

Lino Saputo Jnr has demanded loyalty from potential suppliers in Australia, and also called on rival processors to stop encouraging milk growth without an immediate market.

The CEO of the Canadian-based global processor, Saputo, which has all but purchased Murray Goulburn, addressed 450 suppliers, industry stakeholders and rival processors at the Australian Dairy Conference in Melbourne last week.

Mr Saputo, who the previous day had met with the Australian Competition and Consumer Commission, which is currently reviewing the potential takeover, showed potential suppliers a harder edge to his usually charming persona.

He said over the four years they have owned Warrnambool Cheese and Butter, Saputo had honoured all commitments made to its suppliers and employees, and that Murray Goulburn suppliers can expect the same commitment.

“Without a strong relationship (with suppliers) you’re only as good as your last transaction,” he said.

“We’re thinking about this business, not year to year, but generation to generation. The lifeblood of our industry are suppliers; without them we don’t have an industry.”

Mr Saputo had “a simple message to MG suppliers”.

“You don’t have to be a co-op to act fairly and responsibly. The ethics, respect and loyaty that we employ every day will be translated to our relationships with suppliers.

“I want to be clear, that loyal, ethics and respect go both ways. We made it clear to suppliers if you are going to be a supplier that jumps around, it will be very tough for us to be loyal in return.

“However, if you’ve been loyal to our organisation and we decide one day to close a plant that’s close to your farm, it’s our responsibility to make sure your milk comes to one of our facilities.”

Mr Saputo said the company “aggressively” pays down its debt and keeps its “balance sheet clean” to enable it to take advantage of future potential acquisitions.

“The dairy industry has a great future, but as an industry, we need to be mindful of the fact that we need to balance supply and demand.

“Part of my frustration is I think there is a lack of leadership in the industry, perhaps in the producing side. We need to be responsible when putting production on at farm level, that there are consumers for these solids. And if there won’t be consumers, then stock piles will grow.

“If stock piles grow, the prices will be depressed. Somewhere along the line there needs to be better balance in producing the amount that will be consumed.

“I’m hoping somewhere along the line we may have some influence there.

“This is where I’m hoping the industry gets to. And with 1.5 to 2 per cent growth per year, I think there’s a great living for every stakeholder in the dairy industry — producers and processors.”