It is believed Murray Goulburn executives raised the prospect of receiving financial assistance from the Victorian Government. It is understood a similar request has not been made of the Federal Government to date.
The co-operative met with Deputy Prime Minister Barnaby Joyce in Canberra on October 6, and Victorian Agriculture Minister Jaala Pulford early last week.
A Murray Goulburn spokesman said the meetings were held at the conclusion of the most recent round of supplier meetings “to provide an update on MG’s strategic review and current financial position”.
Murray Goulburn would not comment when asked if it had requested a bailout, which industry speculation suggested could be more than $500 million.
It is understood no request was made for federal funding at the Canberra meeting, which included Murray Goulburn chief executive Ari Mervis.
It is not clear who represented the co-operative at the Victorian meeting.
The meetings came at Murray Goulburn’s request as Mr Joyce faced a citizenship challenge that threatened to remove him from the parliament, and on the first day Ms Pulford returned to parliament from leave.
Murray Goulburn’s meeting with Ms Pulford was on the eve of the co-operative’s announcement it would axe 60 tanker drivers.
The offices of ministers Joyce and Pulford remained tight-lipped about the meetings.
Both state and federal governments have shown a willingness to intervene to assist private enterprise in the past, most recently both governments at Alcoa in Portland, the Victorian Government at the Heyfield timber mill and the former Victorian Coalition at SPC in Shepparton.
In May, following Murray Goulburn’s decision to close its Rochester and Kiewa factories, Victorian Premier Daniel Andrews took a swipe at the co-operative for the way it had treated its employees and the farmers who supplied it milk.
“I’ll work with the company, absolutely, but I will call it as I see it,” Mr Andrews said at the time.
“I just don’t think our dairy farmers have been treated particularly well by this company for quite some time.
“MG have to have a fresh look at this … If that means the Government needs to get involved to facilitate that or support it I stand ready to do that.
“I think our dairy farmers were very, very badly treated and indeed these staff have every reason to be upset and angry, of course.
“Let’s try and come together and work together for a more positive outcome for them.”
Murray Goulburn’s AGM is due at the end of the month.
It has not speculated about the value of the co-operative, which revised its milk production forecast to two billion litres earlier this season — its worst figure in more than 20 years — down from 2.3 billion litres it forecast at the start of the season.
“MG and its financial adviser Deutsche Bank AG are engaging with a number of parties to assess their proposals, including valuation,” the MG spokesman said.
“MG notes there is no certainty that any transaction will eventuate.”
Last week Murray Goulburn axed 60 tanker drivers and hinted it could shrink its fleet of milk tankers in response to dwindling milk supplies.
Jobs were lost at Koroit, Leongatha, Maffra and Rochester. Murray Goulburn confirmed it would now have about 150 drivers.
It follows 360 jobs lost when Murray Goulburn closed the Kiewa, Rochester and Edith Creek factories.
“As a result of the reduction in milk intake there will be a reduction in MG’s fleet requirements and a reassessment in future fleet investment,” a spokesman said.
Murray Goulburn offered “no comment” when asked how much the redundancies would cost the company.
Fonterra, which collected 23 per cent more milk this season until the end of last month, said it had engaged contractors to assist with milk collection in the lead-up to the season peak.
A Fonterra spokeswoman also said it was upgrading its fleet to add new, larger capacity and more efficient “truck and dog” tankers.
Four more tankers joined its fleet this week with another four due in coming weeks.
“With regards to the recent announcement around MG tanker drivers, since reopening our Stanhope cheese plant we’ve recruited numerous drivers, and we’d welcome applications from tanker drivers interested in joining Fonterra’s fleet,” the spokeswoman said.
Meanwhile, Burra Foods announced a 10 cent a kilogram of milk solids step-up at the weekend.
The move by the South Gippsland-based processor comes a week after Warrnambool Cheese and Butter increased its farm gate milk price to $5.55-$5.75kg/MS inclusive of a 40c/kg MS “commitment bonus”.
