Kiwi backers vote en masse

By PHILIPPA STEVENSON

The Kiwi Dairies-Northland merger scored highly in Taranaki yesterday as battling dairy companies looked less like respectable major exporters and more akin to rival provincial rugby sides.

Galvanised by the pre-match hype of Waikato's New Zealand Dairy Group, Kiwi's team turned out in force, a Kiwi spokesman said.

An unprecedented 1100 of Kiwi's more than 4200 suppliers - well above the number usually attending an annual meeting - went armed with their own and proxy ballot papers to vote 90.38 per cent in support of the merger with Northland.

Kiwi chairman John Young said the support "showed what Kiwi shareholders thought of Dairy Group's attempt to interfere in the democratic process during the past 48 hours."

He had already harshly criticised Dairy Group chairman Henry Van Der Heyden for his call for the "curtainraiser" merger to be abandoned because it threatened the industry's mega co-op big game.

Mr Young accused Mr Van Der Heyden of the "blatant politicking" which had been the blight of the industry.

"It is also behind the problems we are having trying to reach merger terms [between Kiwi and Dairy Group]."

Last night, as he headed to Whangarei for today's vote by Northland suppliers, Mr Young said the overwhelming vote showed that Kiwi farmers knew the merger would precipitate industry deregulation.

It also gave the industry a strong mandate to stay cooperative and was a challenge to the Commerce Commission, which had signalled that it had to take a new form, he said.

Northland chairman Greg Gent, who attended the Kiwi meeting, said the agreement to merge was logical, positive and represented "the biggest step so far toward development of the mega co-op."

After the vote, Mr Van Der Heyden said "the prospect of a weakened balance sheet for MergeCo has become reality. That's changed the negotiating picture overnight."

But rather than waste time "pointing the finger," he would urge Kiwi and the Dairy Board to fast-track the mega co-op business plan as "the only way to keep farmers' confidence in MergeCo."

Dairy Board chairman Graham Fraser praised Mr Van Der Heyden's initiative and said he had called a meeting of Kiwi and Dairy Group leaders for next Thursday. He did not know how quickly the plan could be finalised.

The business plan will outline the financial substance and benefits of the mega co-op, including the one-off advantage of the "catalytic event" from integrating up to eight processing companies with the exporting Dairy Board.

It has been worked on by finance staff of Kiwi, Dairy Group and the Dairy Board, was expected this month but is now forecast to be completed in late January.

Mr Van Der Heyden said concentrating on completing the business plan would keep a focus on the industry's future and stop the two co-ops from getting bogged down in old arguments.

"The business plan is the proof every farmer needs that MergeCo is the right way to go. It's the hard numbers they need to make the hard decision."

Rejecting Mr Young's criticism of him, Mr Van Der Heyden said he refused to "play the man instead of the ball."

Meanwhile, the Farmers for Control lobby group has urged the companies to learn from other successful merger negotiations, such as this year's integration of rival Danish co-ops MD Foods and Klover.

"Their example illustrates what can be achieved when there are two willing, motivated negotiating parties," said spokeswoman Catherine Bull.