Divisions appear in final days of GlobalCo lobbying

By PAULA OLIVER

The debate over the proposed dairy mega-merger is heating up with a week to go before the crucial vote by farmers.

Opponents of the merger claim to have been belittled and intimidated as the backers of GlobalCo reach the end of a hectic schedule of 60 meetings to explain the $12 billion initiative.

The farmers vote next Monday.

Some who oppose the merger say they have become scared to state their views publicly.

They claim there are top-level industry players who are not openly taking a position because they are concerned about future dealings with GlobalCo if the proposal goes ahead.

The merger of Kiwi Dairies, the New Zealand Dairy Group and the Dairy Board first ran into problems when the parties failed to agree on who should fill the million-dollar chief executive's seat at the new company.

Rumoured internal wrangling over the issue set the merger's timetable back a month, and now some farmers say they fear a low voter turnout from colleagues who have become disillusioned with the process.

The merger needs a 75 per cent approval vote from both Kiwi and Dairy Group farmers to go ahead. Kiwi's strong Taranaki base is said to be in favour, but Dairy Group's Waikato farmers are causing concern for GlobalCo supporters.

Dairy Group's South Island farmers, said to support the merger, are a much smaller group than their Waikato colleagues.

GlobalCo chiefs are determined that the merger will not be derailed by bitter sniping or political battles.

They will finish their series of farmer meetings tomorrow, and chairman John Roadley said they had drawn good turnouts.

Rock-solid support for the merger had been revealed, he said.

"I absolutely anguish about where we're going to end up as a dairy industry if the farmers reject this proposition," Mr Roadley said.

"The fact is that the farmers have always made the right decision for their business, and I'm confident they'll make the right decision this time."

He said the credibility of the anti-merger group Farmers for a Better Dairy Deal was "not all that crash-hot."

But a co-leader of the group, Hilary Webber, said it was unfortunate that the industry could be internally destructive.

She objected to her group's credibility being questioned, pointing out that she had been the first female director of the Dairy Group, and that her co-leaders, Malcolm Bailey and Mark Masters, were both former presidents of Federated Farmers.

Farmers for a Better Dairy Deal will hold meetings this week in Waikato cowsheds.

They plan to put forward an alternative proposal and push the view that the structure of GlobalCo does not adhere to that recommended by consultants McKinsey and Company when it studied the industry's options in 1999.

Key elements are missing, they say, not least of which is the question of where the big new business will get the capital to help it grow.

Mr Masters said: "You don't need to be a rocket scientist to work out that GlobalCo will need a lot more capital before it can realise the dreams farmers have been presented with.

"Simply merging the industry doesn't make it any bigger or create any new capital."

Mr Masters said that GlobalCo's leaders were running around desperately trying to show a unified face, when behind the scenes things were not unified.