Low turnout tipped for crucial dairy merger poll

By PAULA OLIVER

Dairy farmers will vote on the proposed mega-merger of their industry next month - but some are predicting that farmer frustration over delays will bring a low turnout for the crucial poll.

Originally scheduled to vote on the GlobalCo proposal in mid-May, dairy farmers were told yesterday that they would have the chance to vote for or against the merger at a series of meetings on June 18.

The merger will create New Zealand's biggest company, and it is being painted as the only option that will ensure the survival of a locally owned industry.

The vote delay has been caused by the failure of dairy officials to reach agreement on who will fill the chief executive's seat at GlobalCo. It was confirmed yesterday that the highly sought-after job at the top of the $12 billion company will be won by an internal candidate - but the merging parties cannot agree on which one.

Kiwi Dairies is said to be keen to put Craig Norgate in the job, but New Zealand Dairy Group players are believed to be unhappy at the prospect. Others on the shortlist include the Dairy Group's Chris Moller and David Pilkington.

GlobalCo chairman John Roadley said that no new contenders would be added to the list. Instead, a sub-committee of five would be set up to work towards recommending one of the candidates to the GlobalCo board.

That board has, until now, been unable to decide among the three.

Mr Roadley conceded that the chief executive issue had been underestimated when the merger agreement was signed nearly six months ago. The agreement stated that farmers would know who the chief executive was when they voted. It has now had to be changed to accommodate the continuing executive search.

"Clearly there's been a lot of issues around the CEO. The heart of the problem is who is the appropriate individual to lead New Zealand's biggest industry going forward, achieving the integration of the three businesses," said Mr Roadley.

"The simple fact of the matter is that until we have a mandate, we don't have a company to appoint anybody to."

Mr Roadley said representatives of the merging parties, Kiwi Dairies, Dairy Group and the Dairy Board, hoped to appoint a chief executive by the end of June.

The future of GlobalCo lies in the hands of farmers, who must give 75 per cent vote approval to see it go ahead. Though some regions are openly voicing their support, dairy heartland Waikato - a Dairy Group region - is understood to be marginal.

Waikato Federated Farmers president John Vincent told the Business Herald that farmers would be pleased to see a process in place to settle the chief executive issue.

"I think some people want to get out there and vote, but there's also a bit of apathy that it's taken so long, and some have lost interest," he said.

"I don't think the turnout for the vote will be great.

"But I think it will be in support of it at the end of the day - just not overwhelmingly."

GlobalCo representatives will meet farmers throughout the country in the next 19 days.

Mr Roadley said all that the industry had built up in the past 20 years was at stake in the vote.

Charlie Pedersen, Dairy Farmers of New Zealand chairman, said that once the vote was over and if GlobalCo was formed, the parochial barriers would completely break down and everyone would be focused on the future.

"Farmers will applaud this latest move," he said. "They don't mind who the CEO is."