CHANGES will be made to improve the competitiveness of Murray Goulburn Trading, the company’s Melbourne annual general meeting has been told.
Several shareholders asked why commodities like fertiliser were more expensive at the trading stores, than at nearby competitors.
One shareholder said the stores were “ripping off” farmers – “you are killing us,” he said.
Farmer, Ann Jarvis, of Kergunyah, said at the Kiewa store, she couldn’t buy local products.
“It all goes to Melbourne and they have to order a pallet to get back what you want,” she said.
Chairman Philip Tracy said the company did not get it right, all the time.
“Certainly, we are putting a much bigger emphasis on trading to try and improve,” Mr Tracy said.
“It’s not perfect, and we are also trying to use our scale more efficiently, because we don’t get it right all the time.”
Ms Jarvis also asked why Coles at Wodonga seemed to stock only a limited line of Devondale products.
She the only cheese available was the 1kg block, while there was also a limited range of yoghurt.
“Coles promised faithfully they would increase presentation of all our products on their shelves – in Wodonga, it’s important to get more than two flavors of yoghurt, because that’s a very small section of a very large yoghurt selection,” she said.
Managing director Gary Helou admitted Devondale was “under-represented” on yoghurt and it was an issue.
“The yoghurt marketplace is very competitive,” Mr Helou said.
“We don’t hide away from the issues with the big guys and we had an understanding we would get a better distribution of our products.
“ Coles is a tough customer and it is a matter of negotiating with them, for more space.”
The 1kg block of cheese was a best-seller, he said, while new plant at Cobram would allow the company and Coles to take on more products, he said.
“Coles is incredibly helpful and co-operative.”
The meeting also addressed buy-backs of B and C Class preference shares, at $1.25 each, and constitutional amendments.
Mr Tracy said that after a record 2013/14, this financial year was shaping up to be another significant one for the company.
Proposed changes to the company’s capital structure and opportunities to capture value from international growth markets were positive.
“The co-op’s board remains positive about the dynamics driving demand for dairy foods, particularly in export markets,” he said.
In 2013/14 the company received approximately 3.4b litres or 37pc of Australia’s milk and generated sales revenue in excess of $2.9 billion.
Ordinary shareholders also passed special resolutions required for MG to conduct voluntary selective buy-backs
Changes to MG’s constitution were also approved by shareholders, to assist in a proposed $500m capital raising venture.
They would take place, whether or not the capital raising occurred, Mr Tracy said.
“The MG board determined that is was important to seek shareholder approval for these general changes in advance of the proposed capital structure being finalised, because had they not been approved, further modifications to the proposed capital structure would need to be made, which would impose additional costs and
affect its efficiency,” he said.
“We are very pleased that we can now move forward with these constitutional changes.”