We're getting close to the peak of the production season in southern Australia, in one of the most tumultuous periods in the recent history of the industry. In the past 18 months, an unprecedented volume of milk has moved between major dairy companies in a short space of time, and most likely has some way to go yet, as the aftershocks of the major step-down in milk prices towards the end of the 2015-16 season continue to reverberate.
People are generally wary of those who say: ‘Trust me’.
Farmers are particularly wary of processors who dramatically slash their farmgate milk price, attempt to claw money back under the guise of a “Milk Supply Support Package (MSSP)”, and then announce a profit.
They are wary of platitudes, especially those that precede annual results that show an increase in profits from $21.2 million to $39.8 million; a $2 million salary for the man behind the collapse, Gary Helou; and a payment of $314,046 to the chairman.
The load carried for these events should be shared: board, management, staff, suppliers, unit trust shareholders.
Announcing a review of the MSSP is a step in the right direction.
Announcing it is scrapped altogether would have been better.
It’s one thing to talk about acknowledging the pain caused by recent events: it’s another to help ease it altogether.
It shows the board and executive had lost touch with its suppliers when it decided to introduce the MSSP back in April.
A simple pub test could have told you it was a bad idea.
It’s only now, after suppliers have expressed their outrage by moving to rival processors, and the corporate watchdog, the ACCC, has announced it is investigating that MG says it will re-consider the package.
MG supplier and incoming board nominee Lisa Dwyer is right when she says decisions need be made – and fast.
As it is, the MG AGM is shaping up to be the hottest ticket in town.
If they haven’t scrapped the MSSP by then, it will be a bun fight to get through the door.