Judgment day for farmers on dairy merger

By PAULA OLIVER

The fate of the biggest merger proposal in New Zealand history should be known by late this afternoon.

Farmers will today arrive in droves at meetings in Matamata, Hawera, Ashburton and Invercargill to have the final say on whether the country's two biggest dairy companies, Kiwi Dairies and the New Zealand Dairy Group, should merge to form one of the world's biggest dairy companies.

It is expected that the vote will take two hours to count, and polls indicate that it will go down to the wire.

Publicly confident GlobalCo leaders were said by insiders to be tense and nervous on the eve of the vote. GlobalCo needs at least a 75 per cent approval rate to go ahead.

Dairy heartland Waikato holds the key to the merger's chances - 4500 of Dairy Group's 7500 eligible voters are based in the region.

They have been heavily lobbied by anti-merger campaigners Farmers for a Better Dairy Deal over the past fortnight.

The lobby group's representatives, who claim to have enough support to roll the merger, will be joined at the Matamata meeting by GlobalCo chairman John Roadley and hordes of Dairy Group farmers.

They will be linked by video conference to corresponding Ashburton and Invercargill farmer gatherings.

A meeting of Kiwi Dairies' shareholders will take place at 10.30 am in Hawera - but unlike the Dairy Group's assembly, the media are barred from Kiwi's proceedings.

Those against the merger took the opportunity to have a final swipe at GlobalCo's united front last week, claiming the different meeting set-ups were an example of two cultures existing within the merging companies.

Debate about the merger over the past week has been ugly at times, with personal smear campaigns and nasty e-mails doing the rounds.

The vote has also ben muddied by a failure to agree on a chief executive for the new company.

GlobalCo has wheeled in its big guns, sending directors to the National Fieldays to meet farmers, and putting charismatic industry figure Warren Larsen in the spotlight to win over opinion. Dairy statesman Sir Dryden Spring has also come out publicly in favour of the merger.

Mr Roadley told farmers at Fieldays that it was their final chance to build New Zealand's largest company, as future governments would not go through the regulatory requirements again.

"One big New Zealand co-op is going to be an attractive partner for strategic alliances - and we've begun that work with Dairy Farmers of America, the world's biggest co-op," Mr Roadley said. "We will be able to coordinate our industry's strategic acquisitions, such as those in Australia."

Farmers for a Better Dairy Deal has argued that GlobalCo's proposal will be more open to foreign cherry-picking than a two-company, competitive structure.

Farmers not wanting to be part of GlobalCo would have no option but to go to an overseas operator, the group said.

If the proposal goes ahead, GlobalCo will represent 95 per cent of the dairy industry, account for 7 per cent of GDP, 20 per cent of total exports, about 96 per cent of dairy exports and 50 per cent of the domestic dairy market.