Dairy Merger CEO race yawns on as vote looms

By PAULA OLIVER

Dairy farmers may be forced to vote on their industry's mega-merger without knowing who will be chief executive of the planned Global Dairy Company.

Sources say the date of that vote - originally planned for mid-May - will be revealed within a week.

Farmers have 19 days left if they are to vote before June 8 - the latest possible date if the merger is to meet legislative requirements agreed to with the Government.

The sticking point in the merger of Kiwi Dairies, New Zealand Dairy Group and the Dairy Board is rumoured to be the appointment of a new chief executive. Sources say progress is being made "at the pace of continental drift."

Since responding to media reports of a stalemate two weeks ago, Global Dairy Company heads have gone to ground.

GlobalCo staff did not return the Business Herald's calls.

Competition for the top job at the $12.5 billion Global Dairy Company is strong.

Heading the list of contenders is Kiwi chief executive Craig Norgate, but it is believed that some Dairy Group players are unhappy at the prospect of his appointment.

Others in the running include the heads of the Dairy Board's strategic business units, Chris Moller and David Pilkington.

GlobalCo chairman John Roadley has indicated that he would like farmers to know who the chief executive is when they vote, but sources say that unless there is a breakthrough it is now increasingly likely that a vote will be held before the issue is resolved.

"Time is pressing pretty urgently now," a source close to negotiations said. "The rough political reality is this: if we can't get it politically done during what the industry calls its off-season, it's not going to happen. That's generally accepted. There's got to be a farmer vote."

The source said that it would not be ideal to have the vote without a chief executive, but it was inevitable if parties could not get over their disagreements.

Charlie Pedersen, Dairy Farmers of New Zealand chairman, said that privately farmers were overwhelmingly supportive of the merger.

But publicly they were being more coy about their voting intentions, partly because there were still things they wanted to see happen before they gave away their vote.

One such thing is the establishment of a suppliers' council - an integral part of the representation structure for farmers.

"They want to see it at least drawn up so that it is a clear signal from GlobalCo that the farmers' interests are going to be brought to the fore," Mr Pedersen said.

Act MP Owen Jennings was last week less convinced of the overwhelming support for the merger.

"It is now evident that delays are being caused by a lack of support for the proposal among Waikato and Bay of Plenty farmers," he said. "There is considerable disquiet - and even antagonism - over key issues."

The Auckland province of the Federated Farmers met a week ago and resolved that the implementation of GlobalCo should go ahead immediately.

Any difficulty with the appointment of a chief executive could be resolved by continuing negotiation.