New dairy company GlobalCo has a huge responsibility to perform, Chairman of Global Dairy Company John Roadley said after today's vote by dairy farmers to merge New Zealand's two biggest dairy companies.
The merger proposal was voted on by the farmer shareholders of Kiwi Cooperative Dairies and the New Zealand Dairy group this morning, needing 75 per cent approval to proceed.
The result of the Dairy Group's three meetings across the country was 85 per cent in favour, while in Hawera, 83 per cent of Kiwi Cooperative Dairies' shareholders voted in favour of the merger.
"By 85 and 83 percent respectively, shareholders of Dairy Group and Kiwi have placed their confidence in us," Mr Roadley said.
"It is now 'head down' for us as we go about meeting their expectation that this company comes out on top, on any international benchmark that is put in place."
Mr Roadley said the vote ensured that the industry will remain in New Zealand hands.
Dairy Farmers of New Zealand national chairman Charlie Pedersen called the decision "an outstanding mandate."
"At long last dairy farmers have a structure which will allow the industry to realise its enormous potential," he said.
GlobalCo, worth about $12.5 billion, will be New Zealand's largest company and the world's ninth-largest dairy trader.
It will process and market 95 per cent of the output of the industry that earns more export dollars than any other, accounting for fully 7 per cent of New Zealand's GDP.
National Party leader Jenny Shipley welcomed today's decision.
"The dairy industry is in a commanding position, as the earner of one-quarter of New Zealand's wealth. Today's decision will allow the sector to take further steps forward," she said.
Act MP and dairy farmer Penny Webster was disappointed by the vote, but said it was not a decisive victory for GlobalCo leaders, given they originally predicted ninety per cent support.
Ms Webster said care was needed to ensure that the creation of a monopoly would not backfire on farmers.
The Government will introduce a bill to parliament tomorrow to allow the dairy industry restructuring to go ahead.
The bill will be debated and referred to select committee next week.
GlobalCo will have widespread interests in Australia, where the Dairy Board is taking a 25 per cent stake in Victorian cooperative Bonlac Foods Ltd.
Kiwi also owns 80 per cent of West Australian food company Peters & Brownes and NZ Dairy Group owns just over 18 percent of National Foods.
While farmer ownership is retained, GlobalCo plans to issue up to $150 million in capital notes, which it would list on the New Zealand Stock Exchange.
An earlier merger plan ran into problems last year with competition regulator, the Commerce Commission, prompting the industry to revise its proposal and seek to sidestep the watchdog through direct legislation, which the Government agreed to.
- HERALD ONLINE STAFF, REUTERS