The managing director of beleagured dairy broking firm National Dairy Products (NDP) Tony Esposito has admitted the company owes farmers between $1.2 and $1.3million.
Most of the company’s 25 farmer suppliers have left the company in recent weeks, after claiming NDP had failed to pay them for milk.
They said their contract stipulated they would be paid on the 17th of each month, but it was unlikely they would see any money today.
“We have to wait – and we all know the answer, no-one will be getting paid,” former supplier, Simpson’s Alex Robertson said.
Mr Esposito said NDP was continuing to trade, but he didn’t give any guarantees payments would be made.
“We are trying to do everything we can – it’s a very difficult situation, trying to have products to sell, to raise money, is not the easiest thing, right now” Mr Esposito said.
Asked whether NDP would make its November payments, Mr Esposito responded by saying:
“I can’t say no, and I can’t say yes – we will do everything we can.”
He said the company still had two suppliers and “two or three who wanted to join, as well.”
Mr Esposito said he had not used company money for his own expenses.
“Get real, the only money I have taken out of the company is to pay for the loans I have put into the company.”
Mr Esposito reiterated claims, made last week, the company was not in receivership.
“No, not all, I gave you that answer, I have no reason to lie, you could get me for fraud, if I lied.”
He said Scottish Pacific Business Finance was still financing NDP.
“They are 100 per cent continuing to supply us with funding.”
“It’s not like a bank overdraft. They will release money, they can release to us, whatever that amount is.”
Scottish Pacific describes itself as Australia and New Zealand’s largest specialist provider of working capital solutions, with a comprehensive range of debtor finance and trade finance facilities.
Managing director Duncan Russell first said he would not comment, but then added “we are working with the client.”
Meanwhile, South Australian Senator Nick Xenophon has referred the matter to the Australian Securities and Investment Commission (ASIC).
“Suppliers have complained and it warrants an urgent investigation by ASIC,” Mr Xenophon said.
“Mr Esposito needs to make a full explanation to his suppliers, as soon as possible.”
Farmers who have left the company said NDP, believed to take milk from about 30 properties in western and eastern Victoria, was now on the verge of collapse.
Simpson supplier Alex Robertson, who has gone to Fonterra, said he was owed nearly half a million dollars, for milk supplied to NDP.
“It’s gone down the can,” Mr Robertson said.
The company had now promised to pay all debts, by November 17.
“The problem is, they have no suppliers left,” Mr Robertson said.
“He still owes me $48,000 for September’s milk, he owes me $204,000 for October’s milk, so he owes me something like $251,000 – and he owes every other supplier a cheque from last month.”
Chris Gleeson, Crossley, said he was last paid on October 17, and was still owed $350,000 by NDP.
“Everyone is making profits, at the moment, and he can’t afford to pay his farmers,” Mr Gleeson said.
Mr Esposito set NDP up last year, after the collapse of United Dairy Power.
Donna Edge, Carpendeit, said she was still owed $9000, the balance of her autumn-winter cheque.
She has moved across to Murray Goulburn.
“He can’t understand why we all left,” Ms Edge said.
“There’s no correspondence, whatsoever, to tell me when they will pay me.”
She said suppliers had no choice, but to switch processors.
“It’s not rocket science, if you don’t pay, what are you supposed to do ?
“He has done very nicely out of us with his milk brokering business and we were doing all right too.
“Farm Household Allowance and Aussie Helpers puts food on our table, he doesn’t.”
United Dairyfarmers of Victoria (UDV) president Adam Jenkins said his organisation had been working with supplier and government to assist those affected.
“No-one likes this type of thing happening, we are trying to put some things in place to work out how this happened and to minimise that, and see where we do go to from here, in supporting those suppliers,” Mr Jenkins said.
“I think it is also the ability of the supplier to call someone out, when they don’t get paid, because there is a cat and mouse game that goes on, that if they leave, they say they won’t get paid, so they stay a little bit longer.
“That sort of attitude is very hard for a supplier, when they are banking on buying hay and grain, and if they leave, they may not get any money, but the longer they stay, the worse the situation gets.”
Mr Esposito set up NDP in April, 2015, after United Dairy Power closed.
He founded UDP, but sold it to a Hong Kong investor in 2014, before its parent company was placed in receivership.