April 6, 2018
Murray Goulburn farmers vote in favour of selling to Canada's Saputo
Murray Goulburn, Australia's dairy cooperative, has completed its demise after shareholders voted to sell it to Canadian dairy superpower, Saputo, ABC reported.
An overwhelming majority of 98.16% of proxy votes elected for the sale of Murray Goulburn's assets, the main pillar of the four resolutions to be voted on in Melbourne on April 5.
The vote was for the sale of Murray Goulburn assets to Saputo, which will take over all the factories, staff and equipment owned by the cooperative.
Murray Goulburn will keep $200 million to pay for legal costs as well as current legal actions being taken against it and its management for its conduct during the dairy crisis.
Despaired farmers who were against the sale now see it as the only opportunity to leave the former Australian dairy giant with dignity.
Meanwhile, the deal has already received Australian Competition and Consumer Commission's (ACCC) approval after the regulator initially rejected the proposal.
To get permission, Saputo has agreed to sell Murray Goulburn's factory at Koroit, close to its own Allansford factory, which was seen as anti-competitive by the ACCC.
Subject to the Foreign Investment Review Board's approval, Saputo will take over Murray Goulburn's assets on May 1.
At its peak in 2014-15, Murray Goulburn collected more than 3.6 billion litres of milk from Australian dairy farmers to be processed for the local market or exported around the world.
It was Australia's largest cooperative, a business that many farmers believed had their best interests and the highest possible milk price close to its heart.
The company partially listed on the stock exchange in July 2015, but under its new structure, struggled when markets started to turn sour.
It was forced to cut milk prices suddenly and retrospectively, driving its own farmers into debt and many out of the industry.
Then farmers began to desert the cooperative to supply milk to rivals.
With its milk production falling to under two billion litres, difficulties in matching competitors' milk price, and an overbearing amount of infrastructure, the Murray Goulburn board said it had no option but to sell.
On May 1, when Saputo takes over, it will be the first time in the history of the Australian dairy industry that the largest company is foreign-owned.
The demise of Murray Goulburn has not only reshaped the dairy industry; it has apparently left some of its farmers disillusioned about the dairy industry.