Bega Cheese has announced that it will invest in business initiatives that promote both growth and sustainability in the milk supply.
Executive Chairman, Barry Irvin said in a statement to the ASX this morning that Bega will commit up to $25m to develop strategies that strongly link the needs of the company to its suppliers.
“With competition for milk expected to increase and a relatively static Australian milk supply, it is important to think about new approaches that encourage existing suppliers to invest and sustainably grow their milk supply and for the company to have longer term supply security which allows long term business growth objectives to be met,” the statement read.
Bega together with Victorian dairy processor, Murray Goulburn, was unsuccessful in its bid to purchase Warrnambool Cheese and Butter last year, and Irvin says that the new strategic initiatives mark the company’s first move since the WCB bid.
Bega Cheese directors and senior management have already met with suppliers in Western Victoria to discuss the initiatives, and are scheduled to meet Gippsland and other suppliers later in the month.
Irvin said that he wanted to use the meetings to discuss new models comprising of longer term relationships between the company and its suppliers, with the company committing financial support for environmentally sustainable practices and supply growth projects.
According to Bega, the initiatives would “result in longer term supply arrangements between the company and its suppliers and production systems which are aligned to customer requirements and a growing milk pool allowing the company to respond to the ongoing global demand.”
Bega said that it will use the supplier meetings to discuss the approaches, criteria and implementation of the initiatives.