Fonterra rides to the rescue

Rebecca TurnerCountryman
The West logo

Challenge Dairy Co-operative producers have been offered a lifeline, after a decision by Fonterra to offer contracts to all producers who were yet to find a new home for their milk.

Last week, the group announced it was on the verge of collapse and would stop collecting milk, advising its suppliers to seek new contracts with WA’s three existing processors.

Harvey Fresh moved quickly to take up extra milk and provide security to several Challenge suppliers.

Those who have not yet signed new contracts with either Harvey Fresh or National Foods will now have the option to sign a new contract with Fonterra.

Agriculture Minister Terry Redman welcomed the support shown by the industry.

“Many dairy farmers have been faced with the prospect of not being able to find a home for their milk, so the actions of Fonterra and Harvey Fresh will come as welcome relief, ” he said.

“I have appreciated the open and supportive relationship between my office and Fonterra throughout this crisis, and I am very grateful for the valuable role Fonterra has played in helping WA dairy farmers endure these challenges.

“From the outset, the State Government provided a range of support services for families and communities, farmers and employees. I am pleased by the support shown by these companies and my office will continue to talk with industry.”

Last week’s news that the co-operative was on the verge of entering administration prompted PricewaterhouseCoopers (PwC), the receivers for collapsed producer Challenge Australia Dairy, to shut down the company’s Boyanup plant, making nine staff redundant.

PwC said that without milk supplied by the co-operative, the dairy could not operate and so they had no choice but to shut down.

A spokesman for Challenge Australia Dairy administrators, PPB, said it was still working on a restructure of the company which could go ahead even if the co-operative entered into administration. PPB has not set a date for its second administrator’s meeting, but at the latest it will be January 31.

Affected producers from the collapse of Challenge and the co-operative are being offered the opportunity to attend ‘taking stock’ sessions with the Department of Agriculture and Food, Dairy Australia and Western Dairy, aimed at helping them renegotiate new supply contracts with other dairy processors.

Affected Challenge employees can contact a 24-hour free-call helpline on 1800 200 680, or Centrelink on 132 850.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails