By GREG ANSLEY
CANBERRA - Transtasman companies have been told they must push harder and faster into global markets, especially in south Asia and Latin America, as a flood of mergers continues in the world dairy industry.
Delegates at Australia's leading commodities forecasting conference, Outlook, heard yesterday that takeovers and mergers
ran at more than two a day last year.
Among them was New Zealand's move into the Australian market and the proposal to create the world's ninth largest dairy group - the $US5 billion turnover Global Dairy Company.
More than quarter of the 135 mergers and acquisitions negotiated last year covered regional industries, and 17 per cent were cross-continental deals.
And while there were still some diversified players, most global groups were focusing on dominance in only one or two market sectors - Unilever and Nestle in ice cream; Danone, Yoplait and Nestle in yoghurt; Kraft in cheese.
Last year, Danone increased its international muscle with alliances and acquisitions in Argentina, Brazil, China, Saudi Arabia and Sweden.
The increasing concentration of power in the dairy industry as a result of this consolidation was expressed by the tremendous growth in the aggregated turnover of the top 20 dairy companies, Deborah Perkins, Rabo Australia's agribusiness and research services manager, told the conference.
Together they represented a combined turnover of $US100 billion ($232 billion) in 1999, 50 per cent more than the turnover of the top 20 in 1992.
The five biggest companies alone were selling $US42 billion, and the top 10 sell almost $US70 billion.
For New Zealand's GlobalCo and other Australasian players, said Ms Perkins, the critical factors would be an increasing focus on core activities and the development of new value-added products that would both boost farm returns and allow new relationships with rapidly consolidating global retailers and food processors.
Italy's Parmalat, now a force in Australia, completed 20 takeovers in the past two years, and Dairy Farmers of America - which became the world's largest dairy cooperative with the merger of four groups - has entered joint ventures to market its products globally.
Another American group, Suiza Foods, rocketed from obscurity as a family-owned concern to swallow 16 other groups in two years, pushing its annual turnover to $US6 billion, and had moved into into Europe.
