Mr Dettling, of Macarthur, said Saputo’s move was likely to delay any decision that would provide certainty to the future of the Koroit plant and for the dairy farmers who supplied it.
“The sooner the deal (on the Koroit plant’s future) can be finalised, the better,” he said.
“We want it finalised by the start of the next milk season,” Mr Dettling said.
He feared that while the future of the Koroit plant was sorted out, MG would be unable to offer a competitive milk price to stop more farmers moving in the next milk season to other processors who could offer them a more secure future.
He said many MG suppliers were stuck supplying MG in the interim because they had to be supplying the cooperative on August 15, this year to gain a 40c a kilogram milk solids bonus payment for supplying MG.
EARLIER: Canadian dairy giant Saputo has flagged that it is considering excluding Murray Goulburn’s Koroit dairy factory from its proposal to buy Murray Goulburn (MG).
In a statement issued today, Saputo said it “has initiated discussions with the Australian Competition and Consumer Commission (ACCC) in respect of a divestment plan for the Koroit dairy plant in order to address the ACCC concerns and to obtain the ACCC clearance.
“Saputo will continue to work closely with MG and the ACCC to seek approval of the proposed acquisition,” Saputo’s statement said.
The announcement followed the ACCC’s preliminary statement on Thursday last week that it was concerned Saputo’s proposed takeover of MG could substantially lessen competition for milk in south-west Victoria and the south-east of South Australia and reduce the farmgate milk price paid to dairy farmers.
Saputo alreadys owns Warrnambool Cheese and Butter and the ACCC is concerned that if it also owns MG’s Koroit plant, regional dairy farmers will have only Saputo and Fonterra as the two major dairy processors competing for their milk.
Today’s announcement by Saputo, which is one of the world’s top ten dairy processors, is expected to prompt a number of bids from Australian and overseas-based dairy companies for the Koroit plant.
Rabobank senior dairy analyst Michael Harvey said the Koroit plant was attractive to other buyers because it had large scale, was located in a strong milk supply region and was capable of producing high value dairy products.
Among the other dairy companies touted as possible buyers for the Koroit plant are Bega Cheese and the Union Dairy Company, a joint venture between Warrnambool’s Midfield Group and the global Louis Dreyfus agribusiness company that last year opened a milk processing plant in Penola.
Other bids could come from companies rumoured to have been interested last year in buying all of MG.
That list of possible buyers included China’s Yili Industrial Group, the French owned Parmalat and Lactalis and the Asian-owned Goodman Fielder group,
By: Everard Himmelreich
Source: The Standard