Roadley Rejects Splitting Industry
John Roadley, Chairman of Global Dairy Company, has today rejected the suggestion by a fringe group that the dairy industry be split in two and opened up to outside investors.
“For half a decade or more, the dairy industry has been researching and debating the best possible structure for the future,” he said. “Over the years, we have studied dozens of options. All key dairy industry leaders have now agreed the merger is the best way to build on our success of the last 50 years and rejected the two-company model long ago.
“The proposal that has been put to farmers has been agreed unanimously by the boards of Dairy Group, Kiwi and Global Dairy Company. It maintains the unity of our industry so that we have the scale we need to compete successfully on world markets. It keeps the industry in the ownership of New Zealand dairy farmers so that the benefits of our international marketing effort are returned to the New Zealand farmgate. And it integrates our manufacturing and marketing arms so that we can better coordinate our activity.
“This new fringe group recommends at the last minute that we should split the industry in two and open it up to outside investors. That would destroy our unity and our scale and put the returns from our efforts in the hands of outside investors. It is unfortunate that a couple of former farming leaders have allowed themselves to be manipulated by theorists and former bureaucrats in Wellington. Their proposal is simply not credible.”
Mr Roadley said leading international consultants McKinsey’s had said a two-company model was “unlikely to be stable and would not deliver the same value as a single company”.
He said the merger was New Zealand’s last chance to maintain the unity and scale of the dairy industry under the ownership of New Zealand dairy farmers. If the proposal failed, there would not be another one.