Home World Business Murray Goulburn to shut plants, write off farmer loans

Murray Goulburn to shut plants, write off farmer loans

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Australia’s biggest milk producer, Murray Goulburn, will shutter three processing plants and write off almost $150 million in loans made to farmers following last year’s milk price fiasco. 

The company said 360 workers would lose their jobs when its closes its facilities in Edith Creek, Tasmania, and Rochester and Kiewa in Victoria by early 2019. 

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“These initiatives will ensure that MG has an improved processing footprint going forward,” the company said in a statement to the ASX on Tuesday morning.

“Once completed, the closures are expected to deliver an annualised net financial benefit of $40 million to $50 million.”

Murray Goulburn said on Tuesday it would write off loans made to its farmers under the controversial Milk Supply Support Package. 

The company offered the loans early last year after it drastically cut its farm gate milk prices, throwing farmers who had budgeted on the higher price Murray Goulburn had promised into financial turmoil. 

Farmers were due to start repaying the loans in July, but all debts would be forgiven, the company said. Any farmers who had made repayments on their debts between July and September last year would be refunded. 

Murray Goulburn’s sweetener to farmers comes after the Australian Competition and Consumer Commission last week launched court action against the co-operative and its former chief executive, claiming they unfairly treated farmers. 

The plant closures will cost 360 people their jobs. The plant closures will cost 360 people their jobs.  Photo: Jessica Shapiro

The consumer watchdog said the company misled farmers by telling them to expect high opening and final prices for milk solids between June 2015 and April 2016. 

More to come 

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