Koroit factory's sale to Bega welcomed in Koroit

Daly’s IGA supermarket co-owner Peter Daly while said most people in Koroit believed the sale had been unnecessary, it meant the town could move on from the demise of the factory’s former owner Murray Goulburn that had dominated the factory’s fate in recent years.

Mr Daly said Bega Cheese faced a big challenge in building the factory’s milk intake up from its current volume of 300 million litres to the plant’s one billion litre capacity.

He said the factory was one of the best dairy processing plant’s in southern hemisphere and it would be great to see it regain its potential.

He would be pleased to see the Bega Cheese name on the factory because it was a good brand and he sold its products at his supermarket, he said.

But Mr Daly said many in the area believed that if Saputo had been allowed to keep the plant, it would not have lessened regional competition for milk, Mr Daly said.

He said there was strong competition for milk from Fonterra, the Saputo-owned Warrnambool Cheese and Butter (WCB) and the Union Dairy Company.

The plant’s tribulations had played no part in the delays to the start of construction on his supermarket’s expansion plans, he said.

Mr Daly said the delays had been caused by other hurdles and he hoped to take the project to tender in the near future.

Wendy Murley from Mickely Bourke’s Koroit hotel said the sale would give the town more confidence. 

Dot Shanahan from the Koroit newsagency said Bega Cheese was a good company.

Mrs Shanahan said most people in the town had been confident the plant would find a buyer and there had not been much anxiety about its fate.

Bega Cheese supplier John Howard of Purnim said he thought the $250 million price paid by Bega Cheese was cheaper than what had been speculated earlier.

Mr Howard said the sale was bound to increase competition for milk in the region because Bega Cheese would be seeking more milk to fill Koroit’s unused capacity.

“I think it will be good for the industry,” he said.

Bega Cheese had been trying to expand into western Victoria for many years and made an unsuccessful bid for Warrnambool Cheese and Butter in 2013, Mr Howard said.

“It is a logical fit for the factory,” he said of the sale.

Saputo supplier Brian McLaren of Woolsthorpe said he was pleased the factory had gone to an Australian-owned company. He said Bega Cheese had a good record of reliability.

Mr McLaren said he might continue to supply Saputo rather than switch to Bega because Saputo had acted in good faith and paid MG shareholders for their shares when it bought MG.

But he said Bega might have a struggle to make a profit from the Koroit plant if its milk supply remained at only 300 million litres.

Supplier numbers had dropped to about 165, down from the 360 the factory had at its peak, he said.