At a time when Australian owned businesses are under extreme pressure from cheap imports and rising operational costs, pressure is mounting to keep successful processors, such as Warrnambool Cheese and Butter in Australian hands.
Warrnambool has received a host of takeover bids in the past few months. Bega Cheese limited and Victorian dairy co-operative Murray Goulburn have both made offers, but it is Canadian dairy giant Saputo, who have recently raised that stakes by offering a revised takeover bid of $8 cash per share.
Warrnambool’s board has unanimously recommended that the company’s shareholders accept Saputo’s offer in the absence of a superior bid – a move which would take the company out of Australian hands.
Victorian Agriculture and Food Security Minister, Peter Walsh said that sale of Warrnambool to foreign businesses could represent a ‘lost opportunity’ for the Australian dairy industry.
"I think it would be good for the dairy industry if it was a consolidation of dairy assets within Australia so we'd actually have critical mass to compete on the world market," Mr Walsh told The Weekly Times Now.
"I think there was a lost opportunity when … grower-controlled grain marketing organisations were publicly floated and are now owned by multinationals.
"As one of our major export industries, (dairy) needs to capture as much of the value of those export markets for our farmers as possible."
"I think there would be more chance of that being achieved with a consolidation of Australian dairy processing in Australian hands rather than a number of overseas countries having parts of the dairy processing capacity."
Walsh’s comments were echoed by Victorian senator John Madigan who said that his preference was to keep Warrnambool Australian-owned, as multinational ownership of the company could be bad for farmers.
"History tells us while shareholders might make the choice they think is right now, that is often short-lived," he said.
Chief executive of Saputo, Lino A. Saputo Jr said that the final decision is up to the shareholders.
"It is up to the shareholders to decide what is the most compelling offer and I think that we tabled an offer that adds value to shareholders and I hope that all shareholders will see that," he said.
"I'm not going to get into any political statements, nor am I going to change regulations within a country."
Saputo’s offer if accepted by shareholder will be subject to a number of conditions including approval from Australia’s Foreign Investment Review Board.