By PHILIPPA STEVENSON
agricultural editor
Hard numbers on benefits predicted from a dairy industry mega-merger are in the hands of Kiwi Dairies and New Zealand Dairy Group directors - throwing the spotlight back on the big co-ops' stalled talks.
The five-year forecasts from the proposed mega co-op, identified in a business plan
prepared by the industry's top three executives, were presented to Kiwi and Dairy Group directors last week.
The plan is the fifth attempt in five years to identify cost savings and earnings potential from an integrated industry.
All have predicted a similar outcome - a lift in industry earnings of at least $300 million a year.
Last year, then Dairy Board chairman John Storey said that the cost of not integrating was $1 million a day.
On Thursday, in a hectic and tense day, Dairy Board chief Warren Larsen, Dairy Group head Graeme Milne and Kiwi chief Craig Norgate presented their make-or-break findings to the Dairy Group board in Hamilton in the morning and the Kiwi board in Hawera that afternoon.
Graham Calvert, chairman of the Mega Co-op Establishment board, said he judged that directors found the benefits better than anticipated but he was "playing it cool over the weekend."
The true reaction would not be known until directors had more time to consider the figures but, he said, he was quietly confident.
Negotiations on the merger - crucial to forming an industry-wide mega co-op incorporating the Dairy Board - have been on hold since a breakdown in December. The focus has since been on the business plan and any benefits it identified for their potential to be a catalyst in restarting the talks.
However, in a letter to Dairy Group suppliers last week, company chairman Henry Van Der Heyden said a version of the business plan he had seen earlier showed "substantial gains in the mega co-op."
Dairy Group had scheduled 10 meetings with suppliers from March 7 to 16, where it hoped to present the mega co-op business plan, he said.
Kiwi has no meetings scheduled but it is understood it also planned to brief suppliers next month.
Mr Calvert said the establishment board was working on a new application to the Commerce Commission "word by word," and farmer support was essential to taking that step.
He said, however, that the application had to go to the commission before the end of March to meet a September 1 deadline.
