By PHILIPPA STEVENSON
The Bonlac Foods board has bought an alliance with the Dairy Board but two tough selling jobs remain.
Bonlac must convince its 2500 farmer shareholders of the deal's worth, and the Dairy Board will have to convince its truculent constituents, Kiwi Dairies and New Zealand Dairy Group.
As expected, directors
of the large Victoria-based dairy processor yesterday told the annual meeting in Melbourne that they had unanimously agreed on the terms of an alliance to create a huge transtasman dairy business.
Bonlac chairman Bill Hill said the alliance would strengthen the company by underpinning an improved milk price to farmers and substantially reducing debt.
The deal is subject to Dairy Board approval, agreement with Bega Cooperative, which licenses the Bega cheese brand to Bonlac, and a vote by Bonlac shareholders.
Dairy Board chairman Graham Fraser said both Bonlac and the board had some work to do to persuade their shareholders to take the deal. Bonlac farmers appeared cautious but not unsupportive.
The two NZ manufacturing companies had been reluctant to support major alliances while their future structure was up in the air, Mr Fraser said, "but we do need to keep the business moving."
