(MG) announcement on Tuesday was significant for the industry.
In their statement, MG said it would shut down its Rochester and Kiewa factories in Victoria and the Edith Creek factory in Tasmania; and ‘forgive’ the
MSSP or milk cheque clawback from farmers.
We welcome MG’s announcement to scrap the MSSP which, will bring very important financial relief to affected farmers. We believe this will be a step forward
in rebuilding trust and confidence between farmers and the processor.
Let’s hope Fonterra quickly follows suit as it did last year and reverses their cuts to farmers in 2016.
We also need to acknowledge that the factory closures will cause a significant amount of distress to the employees, dairy farmers who supply the factories
and affected communities. This is never easy and these types of transitions are difficult for everyone affected.
MG has said the plant closures are necessary to keep the Co-op sustainable and will initially cost $99m but should get a net benefit from the closures
of $15m from 2018 financial year. MG said about 360 jobs will be lost in the plant closures, which will cut costs by $40-60m over the next 18 months.
ADF recognises that these actions are designed to improve the strength of the company and ensure suppliers remain with the Co-op.
The announcement by MG has really highlighted how important a competitive and strong Co-op is for the dairy industry and we have genuine confidence that
things will change for the better.
Interim ADF Chief Executive Officer