The turbulent Australasian milk market has taken its toll on National Foods, which reported a 6% drop in profits on Friday. The fall in net profit to A$45.1m (US$23.6m) was blamed by managing director Max Ould on the deregulation of the Australian milk market in July 2000, which, he said, had led to substantial price decline in the supermarkets.
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But perhaps the worst is over for National Foods in the milk market with the largest supermarket chain Woolworths agreeing to a 5c a litre price rise in September. There is also speculation among analysts that New Zealand’s milk conglomerate, the Fonterra Co-operative Group, will merge its Australian assets. This includes an 18.3% stake in National Foods, 25% of Bonlac Foods and 80% of Peters and Brownes which could provide substantial cost savings. The Australian stockmarket has responded well to National Foods after it wiped about 30% off the value of the company in the year following deregulation. National Foods gained 3c in a weak market to close at A$2.23 on Friday and A$2.27 on Monday. By David Robertson, just-food.com correspondent Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
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