Murray Goulburn site closures ‘in best interests of suppliers’
2 May 2017
PETER HEMPHILL, The Weekly Times
May 2, 2017 10:26am
MURRAY Goulburn had little choice but to close three dairy factories and abolish its controversial milk price clawback scheme, according to an independent expert.
Financial consultant Grant Samuel and Associates said the dairy company would lose more milk supply and its profitability if it did not take the drastic measures announced today.
Grant Samuel and Associates was engaged by MG to assess action it was considering to counter a 20 per cent decline in milk supply due to a wet winter last year and dairy farmers deserting the company after it announced a drop in the farmgate milk price a year ago.
The independent consultant said closing factories and abolishing the clawback would collectively cost the company $167 million in extra borrowings.
But if the measures were not taken, it would cost more in borrowings if it lost further milk.
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