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Farmers Question Absence Of Value-Added Split

22 July 1999


"Farmers are puzzled and disappointed that the value-added side of their industry is now not to be separated from the rest of the MegaCo."

DFNZ Chairman Charlie Pedersen made this comment today on the basis of feedback he has received from farmers.

In the original concept of the MegaCo, there were to be two income streams for dairy farmers: a) production of commodity milk products and b) ownership of high value, innovative and branded products.

"Farmers saw the separation of the value-added business from the manufacturing and commodity business as an exciting initiative," Mr Pedersen added.

"The separation would allow an influx of new capital, a concentrated marketing and added-value culture, and an opportunity for some international benchmarking. All this was to be achieved while retaining complete control of the important manufacturing base," Mr Pedersen said.

"Farmers need to know why the MegaCo cannot now deliver on the proposal."

"Overall, dairy farmers will be asking a lot of questions about the future of their industry and the industry leaders behind the MegaCo will have to explain their reasoning."


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