Boss confident of Lion deal with Saputo

Warrnambool Cheese and Butter. Photo: Glen WatsonWarrnambool Cheese & Butter boss David Lord is confident Kirin will be able to strike a deal with Canadian outfit Saputo to protect the viability of its entry-level cheeses.

Kirin snapped up almost 10 per cent of WCB, which is the target of a three-way global bidding war, through its subsidiary Lion last month. The purchase was aimed at protecting Lion’s agreement with WCB, which supplies its entry-level cheese brands Coon and Cracker Barrel, rather than as emerging as a fourth player in the takeover battle.

Quebec-based Saputo is the suitor favoured by WCB’s board but is facing competition from Bega and Murray Goulburn which each owns 17 per cent of the company.

Mr Lord said the Lion stake had made a ”complex situation more complex”. But he was confident that Lion and Saputo would be able to strike a deal.

”From what Lion said their motivation to buy their stake was to get a seat at the table. Well they’ve done that,” Mr Lord said. ”Now, I think it’s up to the parties to sit down and talk about how they move forward, in particular Lion and Saputo.”

While WCB’s board is urging shareholders to support Saputo’s bid, United Dairyfarmers of Victoria says farmer shareholders should think again.

UDV has organised a meeting for farmers at the Warrnambool Showgrounds, warning them of the possibility of another Australian company becoming foreign owned. UDV president Kerry Callow said it was important Australia’s dairy industry had a locally owned player that could build significant scale to compete globally.

Ms Callow said this would ensure Australians would still control farm-gate prices. But she said even if Murray Goulburn, Australia’s biggest milk processor, took over WCB, it would still be a small player in the global dairy market. ”It would lift them into the top 20 in the world, not the top five, not the top 10, so we would still be a very small fish in the global market,” she said.

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