Mega merger backer quits Dairy Group

By PHILIPPA STEVENSON

New Zealand Dairy Group chief executive Graeme Milne has quit - a sudden move that has the hallmarks of the "Bay Milk effect" also behind the dumping of former chairman Doug Leeder.

Both men held the same roles in the former Bay of Plenty company which, before it merged with Dairy Group, was one of the principal architects of the mega co-op strategy.

Industry commentators suggested yesterday that both men fell from favour with the hardline Waikato school within Dairy Group for being too willing to compromise to bring about the mega merger between the Dairy Board, Kiwi Dairies and their own company.

They were also seen as a team and Mr Milne's departure was made more likely after Mr Leeder did not make the scaled-down, new-look board this week.

The writing, however, appeared on the wall when Mr Milne was conspicuous by his absence in the recent annual report, which featured only chairman Henry Van Der Heyden, who now will take over as executive chairman until a new chief executive is appointed.

Mr Milne, who took the job only 15 months ago after heading the Dairy Board's European operation, will leave this month.

Explaining the sudden resignation, Mr Van Der Heyden said the newly formed board had confirmed its vision and strategy for the future but had key points of difference with Mr Milne over its implementation.

Mr Milne, aged 46, who fell ill last week, said ill-health had no bearing on his decision. His is the second high-profile resignation in a month after Dairy Board head Warren Larsen said he would quit next May.

Dairy Group shareholders, noting the resignation and the reduction of the board from 16 elected farmer directors to nine, warned that "this board had better perform."

At the annual meeting that cleared the way for director numbers to be slashed, farmers were promised that the leaner board would be a more efficient and effective decision-maker.

Mr Van Der Heyden said the internal board reduction, aided by a facilitator, had been a robust process which had identified necessary skills, but the directors who survived the bloodletting were much as industry sources expected.

The only new face was Hauraki farmer Mark Townshend, brother of former Anchor Products general manager and now Affco chief executive Ross Townshend.

Some thought the long-serving Graham Calvert would return to fight on for some unfinished business but he, along with Mr Leeder and Murray McNaughten, did not seek a board seat.

The board ditched its only woman director, Hilary Webber, who ironically had chaired the governance and representation committee that proposed culling the board. Also to lose out were the outspoken Keith Holmes and two newly elected directors from Southland who barely served a day.

Mr Van Der Heyden retained his chair, and John Roadley remained his deputy.