VLE sought advice from 'prominent Melbourne lawyer' before it opted to close Pakenham

The Victorian Livestock Exchange, which announced last week it would close its Pakenham saleyards on June 30, 2024, has also dismissed rumours the company is preparing its Leongatha saleyard for a multi-million-dollar sale.

VLE chief executive Brian Paynter said the company sought advice from "one of Melbourne's most-prominent property lawyers" prior to its decision to close the Exchange Drive site as it tried to investigate ways to reduce its land tax bill.

"In recent years, the debt that the state government has racked up is the largest debt of any state in Australia," Mr Paynter, who is a former Victorian Liberal Party politician and member for Bass, said.

"His advice was very clear that the land tax would be payable."

Following the sudden decision to close the Pakenham facility, Mr Paynter revealed the VLE was taking $10,000 a week - or $550,000 a year - in land tax for its Pakenham site.

He said the advice from the undisclosed lawyer was clear, and led the VLE board to vote unanimously in favour of closing the site.

"Rather than waste months or years debating or arguing with the state government, the decision needed to be made," he said.

"We do have that advice in writing, but it was from Melbourne's most-prominent law firm and we went straight to the property expert and his advice was based on his recent experience with the State Revenue Office."

Since the shock announcement to close Pakenham with seven months' notice, Stock & Land has been contacted by several agents and industry insiders who claim the decision was part of a broader plan by the VLE to sell its South Gippsland facility at Leongatha.

Mr Paynter dismissed the allegations and said there was "no truth to the rumours" that the company had held discussions with Regional Livestock Exchanges (RLX) regarding the sale of Leongatha.

RLX is one of the largest saleyard owners in Australia with a portfolio of eight livestock facilities across Victoria, NSW and Queensland.

In July 2023, it acquired Mortlake's Western Victoria Livestock Exchange and saleyards at Yass, NSW, to add to its existing yards at Ballarat, Wodonga, Carcoar, NSW, and Inverell, NSW.

"The VLE has a strong and clear commitment to develop the site at Leongatha even further," Mr Paynter said.

"We're not looking to offload or build it up to sell, we're actually looking to build it up with the potential for it to be the busiest and best saleyard in Australia."

He said the VLE was also in the process of selling a 34-hectare property at Bunyip North, a parcel of land on the corner of Tonimbuk Road and the Princes Highway which was once slated for a new saleyard development.

"We didn't see that in recent times as a viable alternative [for a saleyard location] so we put it on the market," he said.

The property has a price tag of $1.8 million, while Mr Paynter said money generated from the sale would be invested into the development of the Leongatha saleyards.

Pakenham Livestock Associated Agents president and Alex Scott & Staff Pakenham livestock manager David Setches said he was still coming to terms with the Pakenham announcement.

The closure of Pakenham will force cattle to be sold elsewhere, including at Leongatha, Yea, Sale and Bairnsdale, and require agents to relocate.

Mr Setches said the closure would hurt the hip pocket of many graziers who would be forced to fork out additional transport costs to send their cattle to market.

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"As grateful as we were when the VLE built the facility when Dandenong closed, it is a slap in the face to all the producers who have stayed faithful and loyal to the VLE over all these years," he said.

"If the VLE had tried and explored to reduce the land tax, people might have been more understanding rather than them just saying it's done and dusted.

"Some of the producers and the agents are disappointed because we knew one day Pakenham would come to an end, but we were operating with the belief that we would always be given two years' notice of the closure."

Meanwhile, agents at Pakenham and Leongatha are yet to meet to determine the days of sale post Pakenham's June 2024 closure.

"I would suspect agents would be keen to catch up sooner rather than later before Christmas, but as soon as practical I would have thought," Mr Paynter said.

"It's a busy time of year and everyone tends to be finishing up and getting their last stock through, so it wouldn't surprise me if the first meeting was after Christmas given the timing."

Mr Paynter said he had contacted "all the major processors that we serve or that our cattle end up at" to determine what days would suit some of the largest volume buyers.

"I'm collecting that information, I'll have information and discussions with both Pakenham and Leongatha agents to come up with the most suitable days," he said.

"I will wait until I hear back from the processors and determine their ideal days, but I suspect perhaps even they won't even agree so it will be a really interesting exercise."