Analysts are forecasting that net profits for 2001 at Australian dairy group NatFoods will fall by at least 10% on the A$52.1m (US$27.38) posted in 2000.

Apparently, the predominant reason for the drop has been NatFoods' inability to acquire or merge with a competitor. The outlook for rationalisation within the industry is bleak, according to analysts, and the pressure is on to form alliances in the light of price rises and the future activities of the newly formed NZ Dairy Board, Global Co.

The price rises in Woolworths supermarkets will give Natfoods a one-cent per litre boost when it comes into effect in September, but as yet Natfoods' attempts to merge with Dairy Farmers in December 1999, and takeover Bonlac Foods earlier this year have been thwarted.

General manager Max Ould has revealed that he wanted to forge a further alliance with Global Co, which already has an 18% stake in NatFoods.