Dairy hopes lift on sale

Rueben HaleCountryman
Brownes managing director and chief executive Tony Girgis.
Camera IconBrownes managing director and chief executive Tony Girgis. Credit: Countryman

WA dairy farmers are hoping for a better future as Brownes owner, Archer Capital, plans to sell the 130-year-old company.

Archer announced plans last week to put Brownes on the market early next year.

It has been a turbulent time for Brownes and its milk suppliers since new boss Tony Girgis was appointed in March last year, with a clear directive from Archer to increase profits for a possible sale.

Under the leadership of Mr Girgis, the company has cut costs and lifted productivity, including rationalising operations back to one processing site, sacking staff and dumping some of its milk suppliers and is now reporting about $15 million in earnings before interest and tax.

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Last month Brownes drew the ire of the industry after their suppliers Tony Ferraro, Dale Hanks and Graham Manning had their contracts terminated, leaving Mr Ferraro and Mr Manning with no other option than to dump thousands of litres of uncollected milk.

WAFarmers dairy section president Michael Partridge said it was disappointing for the industry to have Brownes sacrifice farmers with a short-term accounting strategy.

“Brownes seem to have worried about their bottom line to make it easier to sell the company, more than showing concern for the long-term best interests of the WA dairy industry,” Mr Partridge said.

“They had the opportunity to look at other options to manage their springtime oversupply of milk, other than to cut off farmers.”

Mr Partridge said he hoped whoever bought Brownes was invested in the local industry.

“WA produces a great product and the industry would like to see a buyer take over Brownes who can see the unique quality of milk our farmers produce in this State and is willing to invest in expanding production to supply the local and growing export markets,” he said.

“We also need a buyer that is committed to working with our milk producers to create a sustainable industry for the long term.”

Yarloop dairy farmer Mr Ferraro is the only one of the three dumped suppliers still clinging to hope for a new milk supply deal. He said he has cut his herd from about 300 head to a handful of cows, which he will continue to milk for the next couple of months.

“Brownes have never been interested in the farmers and it has always been about their profits,” Mr Ferraro said.

“They treated me and my boys, and the other farmers who lost their contracts, with a lack of dignity and respect and I hope that whoever takes over the company has a much better outlook than they did.”

Meanwhile, things are looking up for the five dairy farmers who faced losing their contracts with Harvey Fresh in January, with the Parmalat-owned company now offering to collect milk from the farmers it was set to axe in January, providing each supplier with a six-month contract extension option. Brownes were contacted for comment.

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