THE fate of National Foods' takeover of Dairy Farmers has now been put in the hands of the NSW-based co-operative's suppliers.
The postal ballot for the proposed acquisition opened at the end of last week and closes on November 12.
For the takeover to go ahead, National Foods needs the support of at least 75 per cent of Australian Co-operative Foods' active members who vote on the proposal. The co-operative trades as Dairy Farmers.
Victorian, South Australian, Queensland and NSW members received an information pack, which included a 220-page legal document containing detailed information about the National Foods proposal.
ACF chairman Ian Langdon said the board strongly encouraged members to read all the documentation carefully before voting.
"We also recommend they discuss the National Foods proposal with their investment and taxation advisers," Mr Langdon said.
"The proposal is subject to a number of conditions, including that new and existing members enter into revised milk supply contracts with Dairy Farmers Milk Co-operative for a minimum period to June 30, 2010, to secure certain minimum regional volumes of milk."
Dairy Farmers has issued new milk contracts to its suppliers as part of the National Foods proposal.
The new contracts have been sent out after the Australian Competition and Consumer Commission's decision to issue a draft determination, proposing to authorise the milk-pricing and milk-purchasing policies between Dairy Farmers and ACF and the payment of the prices agreed between Dairy Farmers and National Foods for five years.
"Subject to authorisation by the ACCC, attractive milk prices have been agreed until June 30, 2010, and after that date, Dairy Farmers will negotiate ongoing milk prices with ACF (if owned by National Foods), which has indicated an intention to pay Dairy Farmers suppliers regionally competitive farmgate milk prices," Dairy Farmer's chairman Ian Zandstra said.
"The proposal is also subject to a number of conditions, including a condition that new and existing suppliers to Dairy Farmers enter into revised milk supply contracts with Dairy Farmers for a minimum period to June 30, 2010, to secure certain regional minimum volumes of milk.
"For this condition to be satisfied, these new contracts must be entered into by the second court hearing date." This ACCC hearing is expected to be on November 18.
"To secure the necessary volumes of milk in each region . . . DFMC is asking all suppliers to enter into revised milk supply contracts and return the signed contracts by no later than Friday, November 7," Mr Zandstra said.
