Mr Paton, a Murray Goulburn supplier and former co-operative staff member, suggested dairy farmers buy the Koroit factory and use it to process milk for the export market. The suggestion came after the Australian Competition and Consumer Commission flagged the Koroit plant as a stumbling block in Canadian dairy giant Saputo’s $1.3 billion takeover offer of MG’s assets and liabilities.
Saputo last week said it had started talks with the ACCC for a “divestment plan” for Koroit.
Mr Paton said there was an appetite for a “brand new co-operative”.
“It will be called the Koroit co-operative, it will start afresh,” Mr Paton said.
“MG started with eight dairy farmers and one managing director. It doesn’t take much to get going.”
“I worked directly with (former managing director) Jack McGuire and I got a lot of experience from him.”
A focus on exports and cost cutting would help deliver a farmgate milk price that would have farmers interested in supplying the co-operative, Mr Paton said.
“I know (farmers) are sceptical about a co-operative, but if you are talking $6 (a kilogram of milk solids) and everyone else is talking $5.40-$5.60kg/MS, it will make a difference,” he said.
Mr Paton was confident in higher returns at the processor and pointed to the success of Open Country Dairy, New Zealand’s second largest milk processor. Admitting the deal would still require farmers to come on board and buy shares, Mr Paton said the initial support, from farmers and the community had been encouraging.
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