The Blue River Group, headed by former Macquarie Banker turned social advocate Craig Shapiro, yesterday announced its purchase of the Riverina Fresh milk factory and brand in Wagga Wagga, NSW, from NZ dairy giant Fonterra.
Blue River is backed by wealthy investors keen to invest in the agricultural sector on a twin “profit-with-purpose” basis, who believe the Australian dairy sector has a bright future despite its current low-price woes.
Mr Shapiro sees the 94-year-old Riverina Fresh niche fresh milk brand — preferred by many Sydney and Melbourne baristas for its ideal coffee-making properties — as providing an opportunity for both sales growth and regional jobs expansion.
Fonterra said the decision to sell was not due to the current dairy price crash, but in order to retreat to its core businesses and factories, all based in Victoria and Tasmania.
Blue River has offered all 80 existing employees at the Wagga plant their jobs, has hired Fonterra’s fresh milk manager Rob Collier as its new Riverina Fresh chief executive, and guaranteed the 20 farmers who supply it with 40 million litres a year of milk annually continuity of contract and price.
“When you combine the great brand with its importance in terms of regional impact and the ability to invest in the dairy sector, it was an exciting opportunity that was too good for us to miss,” Mr Shapiro said.
Mr Shapiro said he expected growth to come from expanding the retail markets for Riverina, which was mainly sold wholesale direct to city cafes, other than in Wagga and the surrounding Riverina region.
Local Riverina Fresh milk supplier and Australian Dairy Farmers vice-president Simone Jolliffe said she and other farmers in the local supplier group stretching south to Finlay and east to Tumut wanted certainty of price and supply, and were waiting for more details from the Blue River Group at a special farmer meeting on Thursday.
Ms Jolliffe, who together with her husband Neil runs 260 milking cows on their dairy farm at Euberta near Wagga, said because Riverina Fresh only supplied the domestic milk market, its local farmers had not suffered the catastrophic price drops experienced by other Fonterra farmers in Victoria and Tasmania.
Fonterra Australia managing director Rene Dedoncker said the divestment followed the sale of other businesses judged “non- core” last year, including the local yoghurt and dairy desserts unit and its Bega Cheese stake.
Source: TheAustralian
Link: http://www.theaustralian.com.au/business/blue-river-group-buys-fonterras-riverina-fresh-milk-factory/news-story/cb3dc755b0eeb4659d17533596cefc52