Ninety Six per cent of Bonlac Food’s 2200 farmer shareholders voted yes to an alliance with the New Zealand Dairy Board (NZDB) yesterday, paving the way for the creation of a giant trans-Tasman diary company that will be aim to wrestle some of the price control from supermarket multiples.
The NZDB is now free to purchase 25% of the debt-ridden dairy cooperative with a capital injection of A$80m. The two companies will merge their consumer businesses together to sell butter and cheese brands Western Star, Bodalla, Mainland and Bega.
The United Dairy Farmers of Victoria (UDV) have welcomed the move, which is hoped to secure an improvement in the price of milk for suppliers. President of the UDV, Max Fehring, commented: “We expect the New Zealand Dairy Board to take their responsibilities very seriously and to work with the Bonlac Board to rebuild supplier trust and respect of their company.”
In the past year alone, Bonlac has lost the support and milk supply of 600 farms, many of which swapped allegiance to rival dairy cooperative Murray Goulburn.
Within the next two years, the two main dairy companies aim to form one giant entity, to be called the Global Dairy Company, which will represent 96% of the New Zealand industry and significant parts of the Australian industry, through its 68% investment in West Australian processor Peters & Brownes and 18.2% stake in National Foods.
Friday will prove the deciding day for the alliance however, which is still subject to a “yes” vote by Bega shareholders and approval from the Supreme Court of Victoria.