Lino Saputo Junior has rejected concerns that Saputo’s $1.3 billion plan to buy the ailing Murray Goulburn (MG) cooperative will reduce competition for south-west milk.
Speaking to The Standard, the Saputo chief executive said demand for south-west milk would remain competitive with rival Fonterra recently announcing plans to significantly increase its milk receivals.
He said Saputo had proved it would pay a leading milk price since it bought Warrnambool Cheese and Butter three years ago.
It aimed to continue doing so to bring suppliers back to MG after its supply plummeted from 3.5 billion litres in recent years to 1.9 billion so far this season, Mr Saputo Jnr said. He said the company wanted to build up receivals at its factories including the Koroit plant.
He also dismissed concerns that a dairy cooperative was needed in the market to set a sustainable benchmark price for farmers.
“We are not a co-op but we have exceeded the price paid by the co-op in recent years,” Mr Saputo Jnr said.
Mr Saputo has so far spoken to MG supplier meetings at Koroit, Cobden and Mount Gambier and said he had found them “hostile” about the difficult financial circumstances they were in.
MG supplier Brian McLaren of Woolsthorpe said the position presented by MG at the Koroit meeting on Thursday was the co-op was in a very bad financial position.
He expected Saputo would get the 50.1 per cent support required from MG suppliers for the sale.
The story Murray Goulburn sale won’t harm competition: Saputo first appeared on Farm Online.