Shock over billion-dollar deal

Murray Goulburn suppliers have reacted with shock to news that the dairy co-op had accepted a $1.31 billion buyout from Canadian company Saputo.
However Victoria’s peak dairy farmer group is hopeful the deal will help repair confidence in the industry after a tempestuous two years.
The United Dairyfarmers of Victoria (UDV) acknowledged the major announcement but is disappointed at the loss of the largest farmer owned co-operative and wants to support members and long-term suppliers of Murray Goulburn through this difficult time.
“This agreement between Murray Goulburn and Saputo provides the industry with some clarity and a path forward to repair trust and transparency in our sector,” UDV President Adam Jenkins said.
“The Murray Goulburn Board has ensured the deal will be the best step forward for both suppliers and industry, but it is nevertheless upsetting that we have ended up here and we feel for long-term supporters of MG who feel gutted at losing the Australian co-op.”
The deal still needs approval from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB).
“UDV will be watching the development of this agreement and we will be supporting our farmers throughout the process,” Mr Jenkins said.
“The Victorian dairy industry has been built on integrity and community support and it’s now up to Saputo to show MG suppliers a long-term vision that will help keep the sector sustainable.”
Mr Jenkins acknowledged that Saputo, which also owns Warrnambool Cheese and Butter, had built a good reputation within the industry and it is promising to have a company willing to invest $1.3 billion into the Victorian dairy industry.
“We’re pleased to see support for MG suppliers from Saputo in their commitment to ensure continued milk collection and in promising to maintain a strong price for milk,” he said.
Mr Jenkins said the UDV would now call on Saputo and all other processors to show leadership by increasing transparency around milk pricing and showing proper regard for their impact on farming businesses and communities.