Dairy late for a mega-date

WELLINGTON - The man driving the biggest company merger in New Zealand history says the move is already five years too late, and taking time out for a cup of tea is a bad idea.

Graham Calvert wants those knocking the pace of dairy industry reform to do their sums.

It has taken six months to get to the point where legislation is in Parliament and an application is before the Commerce Commission, said Mr Calvert, a director of both the Dairy Board and the NZ Dairy Group.

It would be another year before the proposed mega-dairy company was set up and the industry ready for deregulation.

"We are already probably five years behind," said Mr Calvert.

"The Danes, the Italians and the Irish have already done it.

"If we simply stay and take two or three years to make a decision, most of the good places will have gone."

The mega-company, predicted to be a $40 billion business within a decade, will offer farmers a choice of investment.

They can be shareholders in the raw milk business, invest in the value-added export operation, or buy into both.

Shares can be traded only between farmer suppliers to the mega-company.

Deregulation and the mega-company are due to be operating from September 1 next year.

Land prices are expected to fall slightly then as the values of the property and the farmers' shares in the industry are separated.

But analysts say that if the mega-company delivers on its promises, the value of land could increase.

Mr Calvert said an establishment board of industry chairmen and deputies and two independent directors was now responsible for merging dairy companies and the Dairy Board.

From September next year, a new commercial board of farmer-elected directors would take over.

These directors would appoint directors with top financial and marketing skills, Mr Calvert said, as "people who are good at milking cows and growing grass are not necessarily going to have those top financial skills." - NZPA