Anger and shock at MG Saputo sale

27 Oct, 2017 04:02 PM
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 SUPPLIER SHOCK: Ann Jarvis, South Kergunyah, said she was not surprised at the decision, but was upset it had gone that way.
Once the co-op is gone, the industry is stuffed.
SUPPLIER SHOCK: Ann Jarvis, South Kergunyah, said she was not surprised at the decision, but was upset it had gone that way.

Murray Goulburn suppliers have reacted with shock and anger, at the announcement the co-operative was likely to be sold to Canadian based Saputo.

Swan Hill, Vic, supplier Matthew Glowrey, who has a herd of 1900 cows, said he found out about the announcement, on the way to the annual general meeting.

“It’s certainly a surprise and it indicates the company is in a more serious situation than the information that has been given to us, until now,” Mr Glowrey said.

“It is a disappointing day, it is a dark day for the Australian dairy industry.

“We were a co-operative, when we woke up this morning and now we are not.”

He said it was clear farmers had no control over the company, even though it was a co-operative.

Crossley, Vic, supplier Karinjeet Singh-Mahil, who switched from Fonterra to MG, said she was gutted.

She said suppliers came into the meeting with an open mind, understanding the board would present the best option for suppliers and shareholders.

“They were placed in a position where they had to make some very, very difficult decisions – we are grateful it is not Fonterra,” she said.

Saputo had shown it had morals and ethics by not dropping the milk price last year, when they could have done.

Ms Singh-Mahil said she was disappointed at the Federal Government’s response that they preferred a commercial outcome.

“I think it says a lot about the government’s misunderstanding that they sat back and let yet another Australian organisation be sold out to a foreign-owned one,” she said.

“I really think they need to go back and look at what future they think agriculture has, if we, are simply as Australians, going to be a cost on someone’s balance sheet, rather than being able to share in the profits.

“There is a very big difference between receiving a milk price and receiving a dividend, or receiving a price for your grain, and sharing in the benefits of what happens to that grain.”

She said the government did not understand the consequences for industry when it was just a cost for the rest of the world.

Brad Adams, Strathmerton, Vic, said he was milking 250 cows and based his business on Murray Goulburn’s plans, which never came to fruition.

During the meeting, he thanked the board for “stuffing up the co-op”.

“Its something that’s been hidden from us a fair bit,” Mr Adams said.

“In reality we can read the numbers and see where it's all going, but you would just like some transparency.

“It’s a difficult thing for us to get our heads around.”

Ann Jarvis, South Kergunyah, Vic, said she was devastated, “not because I am surprised, my suspicion was that this would happen, somehow, because I believe we had come too far down the path to go back”.

She said she received the news on the bus, on the way down to the meeting.

“The least they could have done was tell us, after this meeting,” Ms Jarvis said

“Everything that has happened to our company, in the last two years, is a direct result of us having part listed on the ASX and the folly of certain people at the top.”

She said she accepted Australian Securities Exchange rules were different from running a co-op.

“By the same token, it has been devastating for most of the people in the room, we feel totally helpless, and betrayed,” she said.

She said her concern was that Kergunyah did not have the same access to processors, as did other areas of Victoria.

“In five years time, which is supposedly the agreement that has been taken up by Saputo, if it's passed by the Australian Competition and Consumer Commission (ACCC), in five years time, where to then?" she asked.

“Saptuo could just wipe us out with the stroke of a pen.”

Peter Young, Buffalo, Vic, who milks 300 cows, said it was a disaster for the industry.

“They have given us a guarantee, sort of, for the next five years, after that it's going to be a fight to the bottom,” Mr Young said.

“They will be pushing the price down, and down it will go, they won’t want spring flush, they will want a flat milk supply, they will start picking and choosing which farms they want, as things get tighter, and then they will start looking at quotas.

“Once the co-op is gone, the industry is stuffed.”

Read more:

  • MG board recommends sale to Saputo
  • Debt hanging over MG sealed its fate
  • Shock over MG announcement
  • Lino Saputo says co-ops need to do better
  • Anger at MG AGM over annoucement
  • Unit holders urged to sell now
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    Andrew Miller

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    Twitter: @journoandy26

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