Moyne Shire mayor Jim Doukas has called for Murray Goulburn (MG) suppliers to support the dairy giant while it tries to recover from a $370.8 million loss.
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The co-operative revealed a milk intake loss of 22 per cent on Tuesday and chief executive officer Ari Mervis spoke about the decision to axe the expansion of the Koroit factory.
“We announced postponing and then cancelling our other major project – this was done largely on the back of the fact UHT prices into Asia were at an uncompetitive level for us,” Mr Mervis said.
Moyne Shire mayor Jim Doukas said it didn't look good, but he hoped the company could survive.
“I’m hoping and praying that they survive and the community gets behind them,” Cr Doukas said.
“It’s hard for dairy farmers to supply MG if they can get more money somewhere else but that’s free enterprise.”
He said he would be concerned if there was a takeover bid and hoped the company will continue to operate as a “true co-operative”.
“Anything to keep the dairy industry alive is good but my concern is once we lose the co-op then there’s no benchmark,” he said.
Cr Doukas said the news painted a bleak picture for suppliers who had to wait until the AGM in October to decide their future, and called on the government to step in and provide funding similar to the lifeline offered to Alcoa earlier this year.
“If it gets really bad and they get to the stage where they might fold, the government should do the right thing, being a co-operative, and step in and save MG,” he said.
“Help get it back on its feet and grow the company to the size it was or better. And then if they wish they can take their share of what they invested out of it and it can keep going as a co-op.”
But Federal MP Dan Tehan said it would be unlikely because Alcoa’s situation was due to external forces.
“Through no fault of their own the power was cut to the facility,” he said.
“Unfortunately when it comes to MG it’s a different set of circumstances which were inside the company’s control.”
He encouraged suppliers to have a “strong say” in the future direction of the company at the AGM.
Cr Colin Ryan said he hoped MG could “pull through and keep going for the community”.
“If a takeover did take place and they’re able to maintain their current level of service and workforce well that would be good, but ideally it would be good to have MG stay there and continue as it is,” Cr Ryan said.
It was also revealed the company’s two top executives were paid more than $2.8 million in the financial year.