By Philippa Stevenson
Moves toward transtasman ownership of New Zealand dairy industry businesses are gaining momentum with a sales document about to be sent to prospective buyers.
The managing director of Melbourne-headquartered public company National Foods, Max Ould, yesterday confirmed the group's interest in domestic milk retailer New Zealand Dairy Foods.
And last
night, Dairy Group chairman Henry Van Der Heyden said an information memorandum profiling Dairy Foods, "which we can make available to prospective partners", was being prepared.
Dairy Foods conmtrols 40 per cent of the domestic milk products market and has a turnover of $377 million.
Mr Van Der Heyden said no decision had been made on Dairy Foods' sale and the company was not involved in formal talks with any other parties.
The company alone could not consider an outright sale because of its 50 per cent ownership by farmers, he said.
Several Australian dairy companies and the Italian giant Parmalat have previously expressed general interest in the New Zealand industry.
The availability of the memorandum indicates that the talk has reached a more serious level.
Dairy Foods, which trades under the Anchor brand, is half owned by New Zealand Dairy Group, and half by 6800 of its suppliers who gained the shareholding in Dairy Group's merger with South Island Dairy Co earlier this year.
As the major shareholder in Dairy Foods, Dairy Group had to ensure that the company was in the best possible position to take advantage of all possible outcomes resulting from industry restructuring, Mr Van Heyden said.
"On the one hand the Commerce Commission has indicated that it would require the divestment of a domestic market company if the proposed mega co-op were to proceed.
"On the other hand, if the mega co-op doesn't eventuate, then Dairy Foods needs to be in a position where it can consider expanding its operations - both in New Zealand and possibly in Australia."
In the industry's mega co-op plan, the company, which has 40 per cent of the domestic retail milk market and last year had revenue of $377.4 million, was nominated for sale to avoid dominance on the local market.
However, the Commerce Commission rejected the suggestion on the grounds the company would be totally reliant on the mega co-op for supplies of unprocessed milk and dairy products.
The other main local milk company is Mainland, owned by Kiwi Dairies. It recently confirmed its own talks with Australians "because it is in New Zealand's interest to do that."
