The 125 shareholders of tiny Australian dairy cooperative Bega Cheese say they are prepared to wait for big dairy company Bonlac to cut them the deal they want in the Dairy Board's bid to buy into Bonlac.
The farmers have a strong negotiating position because they technically own the high-profile Bega
brand, to which Bonlac Foods holds the marketing rights.
Bonlac has rights to use the Bega brand outside Canberra and New South Wales, while Bega uses it in New South Wales.
The farmers' bid to maximise the value placed on their brand - Australia's biggest cheese brand - in the merger between Bonlac Foods and the Dairy Board has already delayed the deal.
Bonlac Foods and the Dairy Board agreed in April that the board would take a 25 per cent stake in Bonlac, Australia's second-largest dairy company with total sales of $A1.3 billion ($1.72 billion).
Dairy Board spokesman Neville Martin said Bonlac had licensed the Bega brand in most Australian states. "That Bega brand is part of the deal which the Dairy Board is buying into, so issues of ownership and payment have to be sorted out before Bonlac can sign the deal with us."
Bonlac shareholders were originally expected to vote on the merger in August or September.
"We hope to be able to put a comprehensive proposal to our shareholders before Christmas, but because of the complexity of the proposal, a vote may not be possible until early in the New Year," Bonlac chief executive Alex Sloan said.
Bonlac is understood to be negotiating a franchise or lease of the Bega brand, or failing that, an outright purchase, which could allow more value to be added to New Zealand cheese.
Under the proposed Dairy Board-Bonlac deal, the respective consumer businesses of the two companies would be merged into a separate joint venture owned in two equal shares. The Dairy Board would also merge its Australian ingredients business into Bonlac, taking a 25 per cent interest in the company.
- NZPA
