Murray Goulburn to close factories

Murray Goulburn has announced it will close three of its factories.

Australia’s largest milk processor Murray Goulburn is set to axe 360 jobs when it closes three of its factories.

The announcement comes just days after the Australian Competition and Consumer Commission (ACCC) alleged that the company had misled dairy farmers.

The ACCC said that from June 2015 until February 2016 that Murray Goulburn misled farmers by representing its basis for setting an opening FMP of $5.60 per kilogram of milk solids (kgms) and a forecast final FMP of $6.05/kgms.

Murray Goulburn will also wipe the debt owed to them by hundreds of farmers since is slashed farmgate prices last year.

In February, the company reported a $31.9 million loss in its half-year results leading to speculation that closures were imminent.

Murray Goulburn attributed the loss to a slump in milk supplies and falling revenue.

Of the three facilities to be closed next year are Rochester (VIC), Kiewa (VIC) and Edith Creek (TAS).

The first to close will be Edith Creek in the final quarter of 2017. Rochester and Kiewa will follow in the first half of 2018.

Murray Goulburn also announced it would be ending its milk supply support package (MSSP).

The MSSP was originally set up as a way for farmers to pay back what they owed, when the company cut prices last year.

Dairy farmers were left struggling to support themselves when Murray Goulburn slashed the farmgate price to below the cost of production; in an attempt to get back money it was owed.

Axing the MSSP will reportedly cost the company $148 million, but it will relieve the financial pressure and burden on farmers and suppliers.

Electrical Trades Union Victorian secretary Troy Gray said Murray Goulburn was to blame for their reckless milk price promises.

“Murray Goulburn should be ashamed. These workers deserved better. This will be hard for the country towns affected,” he said.

Murray Goulburn’s chief executive Ari Mervis said: “We are committed to ensuring that we provide our affected employees with appropriate levels of support and the recognition that they deserve during this period of transition.”

Deputy Prime Minister Barnaby Joyce said the MSSP axing was long overdue.

“What it puts up in big flashing lights is that the previous management of Murray Goulburn did some pretty ordinary things, and the ramifications of it have been widespread,” he said.

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