The company has also defended the milk support package it introduced to try to soften the blow of the price cut, despite the company implementing a review in September, following supplier dissatisfaction.
The review is expected to be completed this month.
‘‘MG’s Milk Supply Support Package was introduced as the best option to support farmers at the time of the FMP reduction in April 2016, with many already struggling with additional costs due to the exceptionally dry seasonal conditions,’’ Murray Goulburn stated in the submission.
‘‘The MSSP was implemented via the rights MG has under its standard milk payment terms to set the opening price.’’
The company has also said its price cut and retrospective cut complied with conditions of its contract with suppliers.
‘‘The board is of the view that the correct disclosure process and protocol has been followed with respect to all of its announcements.
‘‘Furthermore, MG has acted in accordance with its contract terms in reducing the opening milk price. MG’s actions have been driven by legitimate commercial reasons and this situation has occurred in the past — as recently as 2008-09.
‘‘Reductions in milk price are very regrettable but sometimes unavoidable due to market conditions.’’
Source: CountryNews
Link: http://www.countrynews.com.au/2016/10/30/3374/milk-price-cut-defended