Cheese wars good for sector: Bega

Bega Cheese (BGA) was firmly focussed on acquisitions, not selling down its stake in Warrnambool Cheese & Butter Co (WCB), when it lobbed the bid that triggered a fierce bidding war for the group, Bega chairman Barry Irvin says.

In an interview with Business Spectator, Mr Irvin said he thought the dairy industry had “a lot more consolidation going on” in Australia’s dairy industry when he made the offer, and his focus “was always on trying to execute that”.

“We’ve been very successful in acquiring and building business… and we thought there was a great opportunity there,” he said.

But speculation Murray Goulburn would scoop up Bega if Bega’s Warrnambool bid succeeded, was potentially misplaced, Mr Irvin added.

“I think a lot of people actually didn’t quite predict what was going to happen at Warrnambool Cheese & Butter when we launched the bid and I am not so convinced that it would be as straight forward as somebody else scooping us up.”

Meanwhile, he said, interest sparked by the bidding process was positive for the entire dairy sector.

But Australia’s dairy industry remained hampered by lack of government support, Mr Irvin said.

“New Zealand focuses absolutely on dairy, from government right the way through, whether it’s through legislation or whether it’s through resources, research, or focus on actually how you improve productivity.

“…And you could easily say that that hasn’t been the same in Australia …  there’s a lot of rhetoric around food in Australia, but there actually isn’t a lot of government support for what occurs.

“I’m not talking about subsidy, I’m talking about the research, innovation and productivity, those sorts of things which were once part of the Australian landscape through things like the Department of Agriculture, etc.”