Dairy farmers want to hear Bega's plans

What are Bega's plans for Queensland?

OPINION
Dairy
QDO president Brian Tessmann says milk processors, such as Bega Cheese, need to become more efficient.

QDO president Brian Tessmann says milk processors, such as Bega Cheese, need to become more efficient.

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Since the sale by Lion of their dairy and drinks business in Australia to Bega Cheese, their suppliers and the industry alike have been waiting to hear what their plans for their Queensland operations are.

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Since the sale by Lion of their dairy and drinks business in Australia to Bega Cheese, their suppliers and the industry alike have been waiting to hear what their plans for their Queensland operations are.

We are familiar with how Bega has operated and its relationship with its suppliers down south.

There are several significant issues to be addressed by the new owners over and above what they pay and how they engage with their suppliers generally. Firstly, there is the question of their north Queensland suppliers and the future of the factory in Malanda and secondly, there is the question of factory rationalisation.

The fact there are three large processors in Queensland, each operating one or more processing plants to service the domestic dairy industry, is not efficient. Several plants should be up for commercial rationalisation; some are too old; others are landlocked which restricts expansion and one or two in SEQ are goldmines in the real estate market.

Bega Cheese now owns the newest processing plant in Queensland at Crestmead with options for expansion if desired, so suppliers and their competitors will be eager to find out what their plans are there.

QDO has had discussions with Bega and have found them aware of the issues and supportive of the Far North Queensland industry and supplying the north from the Malanda factory. We also found them supportive in principle of rationalising the southern Queensland processing assets to gain efficiency through newer equipment and more throughput per factory.

From QDO's viewpoint, we welcome Bega's entry into the Queensland market and look forward to Bega operating as a significant and responsible player in this state dairy industry.

After the recent upward farm gate price movement from NORCO, many will be watching Bega's next movement with interest and maybe a little apprehension.

We'll wait and see.

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