Australian Competition and Consumer Commission chair Rod Simms was tight-lipped about who was in line to purchase the factory if Canadian dairy giant Saputo Inc. gets approval to buy MG’s assets and liabilities for $1.3 billion at a ballot of the milk co-operative’s voting shareholders next week.
But Mr Simms told the audience at a Global Food Forum conference in Sydney today, “the good news is, there’s a lot of people wanting to buy it and that’s a positive for the dairy sector, and particularly the export sector”.
Companies so far linked to the sale include Bega Cheese, Burra Foods in South Gippsland, new local food processor the Union Dairy Company and Australian Consolidated Milk.
In a statement of issues released on March 1, the ACCC argued there could be a substantial lessening of competition for farmers’ milk if Saputo was allowed to acquire the Koroit factory as part of its deal for Murray Goulburn’s assets.
Saputo responded to the ACCC’s concerns on March 8 by making an enforceable undertaking to the corporate regulator that it would resell the Koroit factory but in a timeframe that remained confidential.
Mr Simms also renewed calls for a mandatory dairy code of conduct, saying there was nothing in place to stop a repeat of Murray Goulburn’s substantial reduction in the farmgate milk price in 2015-16.
“There are mechanisms in place that make it very hard hard for them (dairy farmers) to switch (processors). If they’re entitled to a bonus from last year’s production they can only pick it up the following year,” he said.
It was hoped the proposed code would address the risk imbalance that was now skewed towards farmers, Mr Simms said.
Mr Simms gave an honest assessment of Australian agriculture, saying the sector as a whole “was a bit behind the times”.
“The agriculture sector has a bit of modernising to do. It could become more sophisticated, with more transparency around pricing, more contractual relationships.
“More orderly relationships between suppliers and processors would help the industry, and its long term interest would benefit from farmers having more price certainty,” he said.
By: ALEXANDRA LASKIE
Source: The Weekly Times