Canadian dairy giant Saputo says Australian dairy farmers have nothing to fear from its proposed $1.3 billion takeover of the Murray Goulburn dairy co-operative.
Saputo chairman and chief executive Lino Saputo Jr has been in Australia to meet with Murray Goulburn's dairy farmer suppliers in Victoria, NSW and Tasmania.
Many of those farmers were shocked and angered when the Murray Goulburn board announced on October 27 that the co-operative would be sold to Saputo.
Saputo already owns Australian dairy processor Warrnambool Cheese and Butter.
Mr Saputo says Murray Goulburn's suppliers need not hold reservations about Saputo.
"There is some frustration among the suppliers about losing their co-op," Mr Saputo told AAP.
"But I think when they hear our story and they hear our ethics and we talk about our history, they know that the buyers of these assets are dairy-oriented people, with good ethics and good character.
"You don't necessarily need to be a co-op to provide loyalty, you don't need to be a co-op to be transparent, and you certainly don't need to be a co-op to look after the interests of the supplying community."
Murray Goulburn's milk supplies have fallen dramatically to about 1.9 billion litres of milk since the co-operative shocked the industry in April, 2016 with a surprise cut to the price it pays farmers for their milk.
The price cut prompted some dairy farmers to quit supplying Murray Goulburn or retire altogether from the sector.
Mr Saputo said the mood of dairy farmers he has met so far was generally good because they see a potential resolution to the saga.
Mr Saputo said Saputo has already been operating in Australia for three years with Warrnambool Cheese and Butter and has been paying leading prices for milk.
Saputo's strong balance sheet, financial flexibility and sophisticated marketing strategies would enable it to do the same for Murray Goulburn suppliers.
Mr Saputo said that if the economics of supplying milk to Murray Goulburn improve, most of the dairy farmers who have deserted the co-operative may come back.
"Even if they want to give us a little bit of time to prove ourselves, I think within a year or a year-and-a-half, we should get back to about 2.5 billion litres of milk," Mr Saputo said.
Saputo intends to get Murray Goulburn's seven operating plants running closer to their efficient capacities and invest in them.
Mr Saputo said the co-operative's Devondale and Murray Goulburn brands were good sellers in Australia and overseas and Saputo wants to capitalise on that.
