Murray Goulburn: Historian says Saputo takeover like a ‘death in the family

Canadian dairy giant Saputo officially takes over Murray Goulburn today after the Australian Competition and Consumer Commission and Foreign Investment Review Board approved the sale.

Ms Watson wrote a book about the history of Murray Goulburn in 2000.

The company, which was started by soldier-settlers, opened its first factory in May 1951 in Cobram, in northern Victoria.

“They could have supplied Kraft, which was the big multinational company but they wanted their own cooperative company,” Ms Watson said.

“So they set up the Murray Valley Dairy Co-operative Company, as it was called then.

“At that stage they had 14 suppliers and the first day they collected the cream there wasn’t enough to warrant turning on the butter churn, so they had to wait until the second day before they could make their first batch of butter.”

Ms Watson said the first few years were tough.

“It was terribly wet and muddy and in those first few years the cream trucks were forever getting bogged, it was really difficult conditions,” she said.

“In a way they were just winging it — none of them had a history of dairy farming, let alone running their own company.”
Cheese sent to England after WWII

Much of the butter and cheese the company produced in its initial years was sent to Great Britain.

Speaking to factory hands who worked there in the 1950s, Ms Watson said the cheesemaking at the beginning was “fairly random”.

“Often it wasn’t particularly good but it really didn’t matter because everything was being exported to [Great] Britain.” she said.

“Britain still had food rationing after the war, so they were desperate for anything they could get, no matter how bad it was.”

Ms Watson said the cheese was sent monthly via ship.

“The cheesemaker was telling me that on one occasion they made a particularly bad batch of cheese and they were a bit embarrassed about it, but they packed it off on the monthly ship,” Ms Watson said.

“Two months later they get a telegram from England saying, ‘Please send more of batch, whatever it was, it was delicious!’

“It had apparently matured beautifully on the voyage but they actually had no way of replicating it.”
Company started to give farmers ‘a better deal’

Ms Watson said the soldier-settlers and dairy farmers started the company to create better prices.

“The idea of having your own dairy cooperative is that you would pay your farmers as much as you could get away with, leaving aside enough to run the factories,” Ms Watson said.

“It was quite a different philosophy … farmers knew they had to stick together if they wanted to get a better deal.

“Each time it got bigger it became that much more powerful and could begin to compete with the bigger companies, and in a way it kept them honest.”

By 2004 the company had more than 3,000 suppliers and in 2008 it turned a profit of $2.6 billion.

But turnover was not always so high.

“It was just so tough in those early years,” Ms Watson said.

“Lack of expertise was one [problem], but they ended up getting the greatest factory manager in Australian dairy industry, Jack McGuire.

“He ran the company for the next 30 years … and when Murray Goulburn was on the verge of collapse in the early 1980s they actually recalled him.

“He came back and rallied the troops, the suppliers, the staff and his most important message was that this is a cooperative and we need to stick together or we’re nothing.”

Ms Watson said the retrospective cuts in 2016 undermined the suppliers’ trust.

“I can understand the point of view of the suppliers thinking their loyalty had been abused,” she said.

“They probably would have thought they had no option but to go.

“There is another point of view that if enough of them had stayed they would still have had their own company; certainly their trust was abused.”
‘Like a death in the family’

As Saputo prepares to officially take the reigns and the once mighty cooperative is banished into history, Ms Watson said she was still coming to terms with it all.

“I can still hardly believe that a company like Murray Goulburn with 2,500 suppliers, Australia’s biggest cooperative, how it can just disappear like that,” she said.

“How it can go down the drain over two years and just disappear from the scene?

“It’s like a death in the family; I feel so sad about it.

“I can only imagine what some of the suppliers who have supported that company for so long, what they feel.”

By: Isabella Pittaway

Source: ABC Rural

Link: http://www.abc.net.au/news/rural/2018-05-01/farewell-murray-goulburn-cooperative-like-a-death-in-the-family/9709846

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