Brownes supplier sees red

Rueben HaleThe West Australian

Disgruntled dairy farmer Vern Pitta harbours doubts over his future as a supplier of Brownes.

Mr Pitta, who runs a dairy at Waroona, has supplied Brownes with milk for almost 30 years.

He told _ Countryman _Brownes had left him with little choice than to consider his options because it was costing him about $190,000 a year to stay with the State's largest milk processor.

He said unless there were some dramatic signs that a sustainable offer from Brownes was going to be forthcoming, he could not see a future with the company.

Mr Pitta's view is not isolated, with other Brownes suppliers contacting _Countryman _to express a similar outlook for their future business dealings.

He said despite numerous assurances of a yearly price rise since Archer Capital-controlled DairyWest purchased Brownes in 2011, only one two-cent- per-litre price rise had been forthcoming.

"We're now concerned promises of yearly milk price increases made by Brownes now seem destined to never materialise," he said.

"We need to see some positive signs coming from Brownes soon and what I mean by soon is within the next month; we can no longer just sit here and say nothing while we slowly go broke waiting for them to do what they said they were going to do."

Brownes has been in the spotlight in recent times after the debt-ridden Archer Capital made several attempts to offload the 129-year-old company, off the back of an extremely disappointing financial result last year.

The milk operations continued to make money in the year to June 30, though earnings before interest, tax, depreciation and amortisation dropped 36 per cent to $10.6 million.

However, Archer had been in talks about financing alternatives since last month when it lodged financial accounts revealing a $13.5 million loss for 2013-14.

A fortnight ago the _Countryman _revealed a new Brownes payment schedule, which is estimated to save millions a year for Brownes in lost interest earnings.

But the new schedule drew the ire of many of its suppliers, still reeling from the deal the former managing director Ben Purcell made with a handful of suppliers, offering a higher price to shore up supply last year.

Last week, news of further disruption flowed with the sudden resignation of interim managing director Craig Wood and strategic projects manager Laurie Cransberg.

Mr Pitta said his feeling of confidence and optimism towards Brownes was at stake, unless new management acted quickly and decisively to restore it.

"With the resignation of Craig Woods and Laurie Cransberg, we are left with nobody else to talk to and with high beef prices and Andrew Forrest investing in the State's meat industry, why would I keep milking cows for Brownes under the present conditions?" he said.

The Pittas' contract with Brownes is due to expire in June 2017, however contracts with many other suppliers, including 30 million litre Lactanz, will expire on June 30 this year.

Brownes declined to comment.

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