May 23, 2007
Australia's AWB to review demerger following wheat marketing decision
Australia's grain marketer and rural services group Australian Wheat Board (AWB Ltd) said it will consider a demerger proposal following the federal government's decision to allow wheat growers to decide how to market their wheat crop overseas.
AWB chairman Brendan Stewart said AWB will make a public statement soon on its demerger proposal if details on new wheat export marketing arrangements for 2008/2009 are already available.
The company has earlier said it was mulling to separate its grain marketing activities from its rural services businesses which include financial services, rural merchandise, rural real estate and handling of wool.
The federal government previously decided to retain current marketing arrangements for the nation's wheat crop until March 2008.
The decision will allow AWB to continue marketing Australian wheat in overseas markets until under what is known as the single desk system.
The government said it the decision will be up to wheat growers to establish a new entity to market wheat abroad.
AWB had been the sole marketer of the nation's wheat crop until its reputation was tainted last year when an Australian judiciary inquiry found that it had paid bribes and kickbacks to the Saddam Hussein regime in Iraq between 1999 and 2003 to win sales.
Following the investigation, the government stripped AWB's right to veto wheat export deals struck by rivals, transferring that right to the federal minister of agriculture.
The government said the minister will retain that right until new arrangements are in place.
AWB's Stewart said the federal government's decision has assured greater certainty for Australian wheat growers and will enable them to plan with confidence for the 2007/08 wheat crop.
Stewart said AWB will continue to maximise financial returns to growers through the national pool for the 2007/2008 harvest and maintain its commitment to its key export markets.
