Murray Goulburn Co-operative Co. Limited (also known as Devondale Murray Goulburn) was a dairy-processing co-operative corporation. In 2018, following financial difficulties and difficulties with suppliers over sustainable prices, the business assets were sold to Saputo Inc, a publicly-listed Canadian dairy company and later the trading name of the business was changed to AG Warehouse. The co-operative was placed into liquidation in 2020.
| Industry | Food Processing |
|---|---|
| Founded | 1950 |
| Headquarters | , |
| Products | Milk Butter Cheese |
| Revenue | + A$ 2.4 billion (2012/13) |
Number of employees | 2,000 approx |
| Website | https://www.mgcl.com.au/about-us |
The agricultural co-operative was formed in 1950 from a group of dairy farms and grew to become Australia's largest processor of milk.[1]
In 2016, turmoil engulfed the processor as the milk price fell below production costs, prompting calls for the board to be sacked or the co-operative to be sold.[2] Thereafter, the former chief executive of Carlton & United Breweries, Ari Mervis, was appointed to the role of CEO and Managing Director[3] and commenced his role on 13 February 2017.
Profile
editDevondale Murray Goulburn has nine manufacturing plants located in Victoria and Tasmania. It has over 2,500 suppliers and supports over 2,000 employees, processing over 35% of Australia's milk supply (3.3 billion litres) into products that are sold to both domestic and export markets.
The company trades in over 100 countries; it is the largest container user in the Port of Melbourne, exporting in excess of 375,000 MT (23,500 containers) within a financial year. Its international business accounts for approximately 9% of the world's dairy trade. It has an annual turnover of approximately A$2.4 billion.
The company's processing plants have been accredited as ISO 9001:2000 manufacturing facilities and are certified by the NSF HACCP – 9000 standard for hazard analysis and critical control points and good manufacturing practice. Its compliance with finished product specifications is independently validated by Dairy Technical Services, located in Melbourne, Victoria.
In early 2010 and again in October 2013, Devondale Murray Goulburn made a bid to take over Warrnambool Cheese and Butter Factory Company Holdings.[4] In 2014, Canadian dairy giant Saputo, Inc. successfully bought into Warrnambool, acquiring 85% of the company's shares.
In February 2016, Devondale Murray Goulburn won a five-year supply contract with Coles Supermarkets, supplying private-label, daily pasteurised milk as well as cheddar-style cheese in blocks, shreds and slices for Victoria and NSW.[5] In July, however, the company was dropped as a supplier by Woolworths, costing the co-operative approximately A$108 million.[6]
In May 2018, the company was sold to Saputo Inc. for $1.31 billion.[7]
Business units and brands
edit- Devondale (consumer brand of milk and cheese)
- Liddells - Lactose free dairy products
- Corporate brands division (supplier to Consumer Brands)
- MG Nutritionals (research division)
- MG Ingredients (supplier of whey, milk powder, concentrate, casein)
- MG Qingdao Dairy
- MG Trading
- Ascend - Proven Sports Proteins
Controversy
editIn early 2016, the managing director of Devondale Murray Goulburn, Gary Helou, left the company after concerns were raised internally about large losses being made, followed by a profit downgrade and a subsequent farmgate milk price slash just after the co-operative partially listed on the stock exchange.[8] The company then slashed the price dairy farmers had been expecting for their milk, and instituted a A$200 million clawback on milk that had already been acquired where the 2,500 farmers would have to pay back the difference. This resulted in farmers being paid less than what it cost to produce milk for the company. The company's behaviour was documented in an exposé by the Four Corners program in August 2016.[9]
References
edit- ^ "Production Summary". Dairy Australia. Dairy Australia. 1 January 2016. Archived from the original on 14 June 2017. Retrieved 4 September 2019.
- ^ Simone Smith (15 August 2016). "Crisis grows for dairy giant Murray Goulburn accused of 'deeply wounding' industry". Weekly Times. News Corporation. Retrieved 15 August 2016.
- ^ Julie-anne Sprague (12 December 2016). "Murray Goulburn appoints former CUB boss Ari Mervis as managing director". Australian Financial Review. Fairfax Media. Retrieved 2 May 2017.
- ^ "Murray Goulburn wants Warrnambool Cheese", The Sydney Morning Herald, 29 January 2010.
- Steve Hynes, "Murray Goulburn makes new bid for Warrnambool Cheese and Butter", The Standard, 18 October 2013 - ^ "Murray Goulburn wins Coles cheese supply contract". Retail World. 5 February 2016. Retrieved 15 May 2017.
- ^ Clint Jasper and Nikolai Beilharz (28 July 2016). "Murray Goulburn loses out as Woolworths hands private label dairy contracts to rival processors". Australian Broadcasting Corporation. Retrieved 15 August 2016.
- ^ Simone Smith (24 June 2019). "Former milk processor Murray Goulburn settles class action for $42m". Australian Broadcasting Corporation.
- ^ Simone Smith (15 August 2016). "Former Murray Goulburn managing director Gary Helou makes first public comments since shock exit". Weekly Times. News Corporation. Retrieved 15 August 2016.
- ^ Debbie Whitmont (16 August 2016). "Dairy farmers forced to sell up in face of plunging milk prices". Four Corners. Australian Broadcasting Corporation. Retrieved 15 August 2016.