in the australian competition tribunal...the bonlac supply company (bsc) is owned by 1,300 victorian...

10
Filed on behalf of Murray Goulburn Co-Operative Co Limited Prepared by: Herbert Smith Herbert Smith Freehills Tel +61 2 9225 5000 Fax +61 2 9322 4000 Email [email protected] Ref: CJ:ALM:82230139 Address for service Level 43, 101 Collins Street MELBOURNE VIC 3000 25369492 IN THE AUSTRALIAN COMPETITION TRIBUNAL ACT 4 of 2013 MURRAY GOULBURN CO-OPERATIVE CO LIMITED RE: PROPOSED ACQUISITION OF WARRNAMBOOL CHEESE AND BUTTER FACTORY COMPANY HOLDINGS LIMITED Certificate identifying annexure This is the annexure marked “RAP71” now produced and shown to Robert Arthur Poole at the time of signing his statement on 16 January 2014. Annexure RAP71 ‘Fonterra Milk Supply – Services and support for farmers’ brochure 0001

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Page 1: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Filed on behalf of Murray Goulburn Co-Operative Co LimitedPrepared by: Herbert Smith Herbert Smith Freehills Tel +61 2 9225 5000 Fax +61 2 9322 4000Email [email protected] Ref: CJ:ALM:82230139Address for serviceLevel 43, 101 Collins StreetMELBOURNE VIC 3000

25369492

IN THE AUSTRALIAN COMPETITION TRIBUNAL

ACT 4 of 2013

MURRAY GOULBURN CO-OPERATIVE CO LIMITED

RE: PROPOSED ACQUISITION OF WARRNAMBOOL CHEESE

AND BUTTER FACTORY COMPANY HOLDINGS LIMITED

Certificate identifying annexure

This is the annexure marked “RAP71” now produced and shown to Robert Arthur Poole at the time of signing his statement on 16 January 2014.

Annexure RAP71

‘Fonterra Milk Supply – Services and support for farmers’ brochure

0001

Page 2: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Fonterra Milk SupplyServices and Support for Farmers01

Fonterra Milk Supply Services and support for farmers

0002

Page 3: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

03Fo

nte

rra M

ilk S

up

ply

Serv

ices

an

d s

up

po

rt f

or

farm

ers

A m

essa

ge f

rom

H

eath

er S

tacy

N

atio

nal M

ilk

Serv

ices

Man

ager

Font

erra

man

ufac

ture

s da

iry in

gred

ient

s,

cons

umer

goo

ds a

nd f

ood

serv

ices

pr

oduc

ts f

or c

usto

mer

s in

Aus

tral

ia

and

arou

nd t

he w

orld

.

Our

pro

duct

ran

ge in

Aus

tral

ia in

clud

es

chee

se, b

utte

r an

d yo

ghur

t, a

s w

ell a

s

dairy

ingr

edie

nts

like

milk

pow

der

and

da

iry f

ats

and

prot

eins

.

The

star

ting

poin

t fo

r ou

r hi

gh q

ualit

y

dairy

pro

duct

s is

on-

farm

. Fon

terr

a is

th

e la

rges

t pr

oces

sor

of m

ilk in

the

wor

ld,

but

that

mea

ns n

othi

ng w

ithou

t a

secu

re

supp

ly o

f hi

gh-q

ualit

y m

ilk.

As

such

, we

are

com

mitt

ed t

o

deve

lopi

ng lo

ng-t

erm

, sus

tain

able

bus

ines

s pa

rtne

rshi

ps w

ith A

ustr

alia

n da

iry f

arm

ers.

We

seek

to

build

the

se b

usin

ess

part

ners

hips

by

inve

stin

g in

our

sup

plie

rs

thro

ugh

a le

adin

g m

ilk p

rice

and

syst

em o

f su

pplie

r in

cent

ives

, com

bine

d w

ith a

ran

ge

of o

n-fa

rm s

uppl

ier

serv

ices

and

sup

port

.

The

Font

erra

Milk

Sup

ply

team

wou

ld

wel

com

e th

e op

port

unity

to

talk

with

A

ustr

alia

n da

iry f

arm

ers

abou

t th

e

pote

ntia

l to

grow

a s

usta

inab

le s

uppl

y re

latio

nshi

p to

geth

er.

Fon

terr

a’s

visi

on

is t

o b

e th

e n

atu

ral s

ou

rce

of

dai

ry n

utr

itio

n f

or

ever

ybo

dy,

ev

eryw

her

e, e

very

day

. As

a le

adin

g m

anu

fact

ure

r an

d m

arke

ter

of

dai

ry

pro

du

cts,

ou

r re

lati

on

ship

wit

h d

airy

far

mer

s fr

om

acr

oss

th

e co

un

try

is

fun

dam

enta

l to

Fo

nte

rra’

s b

usi

nes

s in

Au

stra

lia.

03

M

essa

ge f

rom

Hea

ther

Sta

cy05

In

trod

uctio

n to

Fon

terr

a 06

Su

pply

rel

atio

nshi

p

08

Bu

sine

ss p

artn

ersh

ips

10

Bo

nlac

Sup

ply

Com

pany

14

A

par

t of

you

r co

mm

unity

Co

nte

nts

Font

erra

M

ilk S

uppl

y.

Wel

com

e to

Hea

ther

Sta

cy

Nat

iona

l Milk

Ser

vice

s M

anag

er A

ustr

alia

0003

Page 4: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

05Fo

nte

rra M

ilk S

up

ply

Serv

ices

an

d s

up

po

rt f

or

farm

ers

Intr

oduc

tion

to

Fon

terr

a

As

a gl

obal

bus

ines

s, F

onte

rra

colle

cts

and

proc

esse

s ar

ound

1.3

bill

ion

kilo

gram

s of

m

ilk s

olid

s an

nual

ly a

nd e

xpor

ts m

ore

than

2.

2 m

illio

n to

nnes

of

dairy

com

mod

ities

to

140

mar

kets

aro

und

the

wor

ld e

ach

year

.

Its A

ustr

alia

n bu

sine

ss is

one

of

Font

erra

’s la

rges

t bus

ines

s un

its, w

ith 1

2 m

anuf

actu

ring

site

s an

d ar

ound

1,9

00 e

mpl

oyee

s.

In A

ustr

alia

, Fon

terr

a co

llect

s ap

prox

imat

ely

1.75

bill

ion

litre

s of

milk

ann

ually

fro

m

1,50

0 m

ilk s

uppl

iers

. Thi

s re

pres

ents

ar

ound

20

per

cent

of

Aus

tral

ia’s

tota

l m

ilk p

rodu

ctio

n.

The

maj

ority

of

the

milk

Fon

terr

a pr

oces

ses

in A

ustr

alia

goe

s in

to m

anuf

actu

ring

bulk

da

iry in

gred

ient

s, s

uch

as w

hole

, ski

m a

nd

nutr

ition

al m

ilk p

owde

rs, b

ulk

chee

se a

nd

butt

er, l

iqui

d m

ilk, c

ream

and

a r

ange

of

dairy

-bas

ed f

ats

and

prot

eins

.

We

supp

ly o

ur v

alue

-add

ed d

airy

in

gred

ient

s to

foo

d m

anuf

actu

rers

, fo

od a

nd b

ever

age

com

pani

es, n

utrit

ion

and

phar

mac

eutic

al c

ompa

nies

and

fas

t m

ovin

g co

nsum

er g

oods

com

pani

es

with

in A

ustr

alia

and

inte

rnat

iona

lly.

Font

erra

is a

lso

a m

arke

t le

ader

in

the

Aus

tral

ian

reta

il da

iry m

arke

t, w

ith

a po

rtfo

lio o

f le

adin

g ch

eese

, but

ter,

yogh

urt

and

dairy

des

sert

bra

nds,

man

y

of w

hich

are

hou

seho

ld n

ames

, inc

ludi

ng

Mai

nlan

d an

d Pe

rfec

t Ita

liano

in c

hees

e;

Wes

tern

Sta

r, C

ount

ry G

old,

Mai

nlan

d Bu

tter

Soft

and

Duc

k Ri

ver

in b

utte

r an

d da

iry s

prea

ds; a

nd S

ki a

nd N

estlé

Die

t in

yo

ghur

t an

d da

iry d

esse

rts.

Font

erra

als

o op

erat

e as

a d

edic

ated

sa

les

chan

nel f

or t

he f

oods

ervi

ce in

dust

ry

(i.e.

res

taur

ants

, fas

t fo

od o

utle

ts, c

afes

, re

stau

rant

s, b

aker

ies

and

hote

ls).

Font

erra

is

the

onl

y co

mpa

ny in

Aus

tral

ia t

hat

can

prov

ide

a fu

ll ra

nge

of d

airy

pro

duct

s,

incl

udin

g cr

eam

s, b

ever

ages

, but

ter,

yogh

urt,

milk

, che

ese,

des

sert

s an

d pa

stry

, sp

ecifi

cally

des

igne

d fo

r th

e co

mm

erci

al

kitc

hen

segm

ent.

Sin

ce F

on

terr

a w

as f

orm

ed in

200

1, it

has

bec

om

e th

e la

rges

t p

roce

sso

r o

f m

ilk in

th

e w

orl

d a

nd

is n

ow

res

po

nsi

ble

fo

r m

ore

th

an a

th

ird

of

inte

rnat

ion

al d

airy

tra

de.

Intr

oduc

tion

to

Fon

terr

a

ORIGINAL

0004

Page 5: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Fon

terr

a M

ilk S

up

ply

Serv

ices

an

d S

up

po

rt f

or

Farm

ers

07

Supp

ly r

elat

ions

hip

In o

rder

to

mee

t th

e gl

obal

dem

and

for

dairy

, Fon

terr

a is

wor

king

har

d to

pro

vide

th

e op

port

unity

for

its

Aus

tral

ian

supp

liers

to

gro

w a

s w

ell a

s en

cour

age

the

next

ge

nera

tion

of d

airy

far

mer

s.

Font

erra

is a

ble

to d

eliv

er o

n th

is

com

mitm

ent

beca

use

of it

s bu

sine

ss

mod

el w

hich

is f

ocus

ed o

n pr

oduc

ing

lead

ing

cons

umer

bra

nds,

foo

d se

rvic

es

and

valu

e ad

ded

ingr

edie

nts.

With

a s

tron

g m

arke

t po

sitio

n, F

onte

rra

has

inve

sted

$2

billi

on in

infr

astr

uctu

re,

new

tec

hnol

ogie

s, p

roce

ssin

g

equi

pmen

t an

d co

nsum

er b

rand

s

in A

ustr

alia

in r

ecen

t ye

ars.

Font

erra

is a

lso

wor

king

har

d

to e

nsur

e th

ey h

ave

open

tw

o

way

com

mun

icat

ion

with

the

ir

farm

er s

uppl

iers

.

In 2

009

Font

erra

dev

elop

ed

the

Font

erra

Aus

tral

ia S

uppl

ier

Fo

rum

, whi

ch c

onsi

sts

of 1

8 da

iry

farm

er d

eleg

ates

fro

m a

cros

s al

l of

Fon

terr

a’s

milk

sup

ply

regi

ons.

Fon

terr

a M

ilk S

up

ply

Serv

ices

an

d s

up

po

rt f

or

farm

ers

06 Fon

terr

a’s

com

mit

men

t to

its

farm

er s

up

plie

rs in

Au

stra

lia is

to

b

uild

a s

up

ply

rel

atio

nsh

ip t

hat

hel

ps

gro

w a

nd

su

stai

n t

hei

r b

usi

nes

ses.

0005

Page 6: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Fon

terr

a M

ilk S

up

ply

Serv

ices

an

d S

up

po

rt f

or

Farm

ers

09

Font

erra

is a

n in

nova

tor

in m

ilk p

ricin

g an

d of

fer

its s

uppl

iers

a g

enui

ne c

hoic

e of

co

mm

erci

al o

ptio

ns, i

nclu

ding

the

Sea

sona

l Ra

tio P

aym

ent

(whi

ch is

pai

d on

top

of

its

lead

ing

milk

pric

e) a

nd a

cces

s to

sho

rt t

erm

w

orki

ng c

apita

l thr

ough

pay

men

t ad

vanc

es.

Font

erra

als

o pr

ovid

e a

rang

e of

ince

ntiv

e pr

ogra

ms,

suc

h as

the

Her

d Te

stin

g In

cent

ive

and

Milk

Coo

ling

Equi

pmen

t In

cent

ive,

to

enco

urag

e su

pplie

rs t

o in

vest

in t

he f

utur

e

of t

heir

farm

ing

ente

rpris

e.

Thro

ugh

its a

llianc

e w

ith L

andm

ark,

Fon

terr

a su

pplie

rs h

ave

acce

ss to

a n

etw

ork

of s

tore

s ac

ross

Aus

tral

ia w

ith s

peci

alis

t da

iry

mer

chan

dise

and

age

ncy

expe

rtis

e

in a

reas

suc

h as

live

stoc

k, r

eal e

stat

e,

insu

ranc

e an

d cr

edit

and

finan

cial

ser

vice

s.

Font

erra

mai

ntai

ns a

tea

m o

f re

gion

al M

ilk

Supp

ly O

ffice

rs, w

ho p

rovi

de o

n-th

e-gr

ound

te

chni

cal a

nd s

uppo

rt s

ervi

ces

to s

uppl

iers

.

Font

erra

’s M

ilk S

uppl

y O

ffice

rs w

ork

w

ith s

uppl

iers

to

assi

st t

hem

in a

chie

ving

pr

ofita

ble

and

sust

aina

ble

farm

bus

ines

ses.

Th

e ro

le o

f th

e M

ilk S

uppl

y O

ffice

rs is

to

ens

ure

supp

liers

hav

e th

e fin

anci

al,

farm

man

agem

ent,

qua

lity

assu

ranc

e an

d lo

gist

ical

info

rmat

ion

they

nee

d to

con

duct

bu

sine

ss w

ith F

onte

rra

succ

essf

ully.

Font

erra

als

o co

mm

unic

ates

dire

ctly

with

su

pplie

r in

a v

arie

ty o

f w

ays

to e

nsur

e ou

r su

pplie

rs a

re k

ept

up-t

o-da

te o

n th

e is

sues

th

at a

ffec

t th

eir

busi

ness

.

Supp

liers

hav

e ac

cess

to

seni

or m

anag

ers

at

regu

lar

regi

onal

tou

rs a

nd f

arm

er m

eetin

gs.

The

Font

erra

Sup

plie

r Fo

rum

has

als

o be

en

esta

blis

hed

to p

rovi

de d

irect

fee

dbac

k be

twee

n da

iry f

arm

ers

from

eac

h su

pply

re

gion

and

Fon

terr

a m

anag

emen

t.

Fon

terr

a M

ilk S

up

ply

Serv

ices

an

d s

up

po

rt f

or

farm

ers

08 Busi

ness

pa

rtne

rshi

ps

Fon

terr

a se

eks

to d

evel

op

a g

enu

ine

bu

sin

ess

par

tner

ship

wit

h e

ach

of

its

sup

plie

rs.

0006

Page 7: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Fon

terr

a M

ilk S

up

ply

Serv

ices

an

d S

up

po

rt f

or

Farm

ers

011

10Fo

nte

rra M

ilk S

up

ply

Serv

ices

an

d s

up

po

rt f

or

farm

ers

BSC

sha

reho

lder

s ac

coun

t fo

r

appr

oxim

atel

y 80

per

cen

t of

the

milk

Fo

nter

ra c

olle

cts

in V

icto

ria a

nd T

asm

ania

.

In it

s cu

rren

t fo

rm, B

SC w

as c

reat

ed w

ith

the

acqu

isiti

on o

f th

e Bo

nlac

bus

ines

s by

Fo

nter

ra. B

SC is

gov

erne

d by

a b

oard

of

four

dire

ctor

s re

pres

entin

g th

e di

ffer

ent

farm

ing

regi

ons

and

oper

ates

on

co-

oper

ativ

e pr

inci

ples

.

At

pres

ent,

BSC

’s fo

ur d

irect

ors

are

A

dam

Jen

kins

, Sim

on F

inge

r, A

last

air

Mac

dona

ld a

nd m

ysel

f, w

ith J

ohn

Law

rens

on a

s ou

r co

mpa

ny s

ecre

tary

.

BSC

and

Fon

terr

a ha

ve a

Sup

ply

Agr

eem

ent

in p

lace

. Thi

s ag

reem

ent

ensu

res

that

BSC

shar

ehol

ders

hav

e a

buye

r fo

r

thei

r m

ilk a

t a

com

petit

ive

pric

e. T

hrou

gh

BSC

, Tas

man

ian

farm

ers

have

acc

ess

to t

he

sam

e pr

icin

g sy

stem

as

Vic

toria

n fa

rmer

s.

BSC

als

o ac

ts a

s a

mec

hani

sm f

or

inte

ract

ion

betw

een

Font

erra

and

Aus

tral

ian

dairy

far

mer

s. T

hrou

gh B

SC, d

airy

far

mer

s

also

hav

e a

pow

erfu

l and

col

lect

ive

voic

e

whe

n in

tera

ctin

g w

ith F

onte

rra.

The

Bo

nla

c Su

pp

ly C

om

pan

y (B

SC)

is o

wn

ed b

y 1,

300

Vic

tori

an a

nd

Tas

man

ian

d

airy

far

mer

sh

areh

old

ers

in A

ust

ralia

. It

acts

as

an a

gen

t fo

r m

ilk c

olle

ctio

n

for

Fon

terr

a in

so

uth

-eas

tern

Au

stra

lia.

Ton

y M

arw

oo

d

Cha

irman

, Bon

lac

Supp

ly C

ompa

ny

Bonl

ac S

uppl

y Co

mpa

ny

0007

Page 8: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Fon

terr

a M

ilk S

up

ply

Serv

ices

an

d S

up

po

rt f

or

Farm

ers

013

As

a d

airy

far

mer

, it

is im

po

rtan

t

for

me

and

my

bu

sin

ess

to s

up

ply

a

com

pan

y w

hic

h is

a le

ader

in t

he

glo

bal

an

d d

om

esti

c d

airy

mar

ket.

Kno

win

g Fo

nter

ra is

the

larg

est

milk

pr

oces

sor

in t

he w

orld

giv

es m

e a

sens

e of

sec

urit

y th

at t

hey

can

max

imis

e re

turn

s to

dai

ry f

arm

ers.

Hav

ing

visi

ted

th

eir

Mel

bour

ne h

ead

offi

ce a

nd s

ever

al

man

ufac

turi

ng s

ites

in A

ustr

alia

and

N

ew Z

eala

nd, I

hav

e se

en fi

rsth

and

that

Fo

nter

ra is

a le

ader

in d

airy

inno

vati

on,

incl

udin

g R&

D, m

anuf

actu

ring

and

pr

oduc

t de

velo

pmen

t.

Lin

da

Ro

ach

e, F

onte

rra

Aus

tral

ia S

uppl

ier

Foru

m D

eleg

ate

– So

uth

Wes

t V

icto

ria

Bar

ry F

ors

yth

, Fon

terr

a A

ustr

alia

Sup

plie

r Fo

rum

Del

egat

e -

Tasm

ania

In t

he p

ast

coup

le o

f ye

ars,

Fo

nter

ra h

as in

vest

ed m

ore

th

an $

60 m

illio

n up

grad

ing

it

s si

tes

acro

ss V

icto

ria

an

d Ta

sman

ia.

This

giv

es m

e co

nfide

nce

they

ar

e co

mm

itte

d to

the

Aus

tral

ian

da

iry

indu

stry

and

are

the

bes

t

long

-ter

m p

artn

er f

or d

airy

fa

rmin

g bu

sine

sses

.

0008

Page 9: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

14Fo

nte

rra M

ilk S

up

ply

Serv

ices

an

d s

up

po

rt f

or

farm

ers

A p

art

of y

our

com

mun

ity

Font

erra

em

ploy

s ar

ound

1,9

00 p

eopl

e ac

ross

Aus

tral

ia, t

he m

ajor

ity in

rur

al a

nd

regi

onal

are

as. T

hese

sta

ff m

embe

rs m

ake

an im

port

ant

cont

ribut

ion

to t

heir

loca

l co

mm

uniti

es a

nd a

re s

uppo

rted

by

Font

erra

’s ac

tive

staf

f en

gage

men

t pr

ogra

m.

Font

erra

als

o se

eks

to s

uppo

rt lo

cal

com

mun

ities

thr

ough

a s

pons

orsh

ip

prog

ram

. Fon

terr

a ha

s m

ade

sign

ifica

nt

finan

cial

con

trib

utio

ns r

ecen

tly t

o or

gani

satio

ns s

uch

as t

he C

ount

ry

Fire

Aut

horit

y an

d th

e Re

d C

ross

.

Font

erra

als

o br

ings

to

the

Aus

tral

ian

da

iry in

dust

ry t

he w

ealth

of

know

ledg

e

and

expe

rtis

e th

at it

hol

ds a

s th

e w

orld

’s la

rges

t da

iry p

roce

ssor

.

Font

erra

wor

k ac

tivel

y w

ith d

airy

indu

stry

as

soci

atio

ns in

Aus

tral

ia a

nd a

re w

orld

le

ader

s in

inve

stin

g in

res

earc

h an

d de

velo

pmen

t to

bui

ld a

sus

tain

able

and

pr

ospe

rous

dai

ry in

dust

ry f

or t

he f

utur

e.

Fon

terr

a w

as f

orm

ed in

200

1, b

ut

has

a h

isto

ry d

atin

g b

ack

aro

un

d 2

00 y

ears

. Fo

nte

rra

and

its

leg

acy

com

pan

ies

hav

e h

ad a

pre

sen

ce in

Au

stra

lia s

ince

th

e

1960

s. T

hro

ug

ho

ut

its

his

tory

, Fo

nte

rra

has

bee

n c

om

mit

ted

to

su

pp

ort

ing

th

e co

mm

un

itie

s in

wh

ich

we

op

erat

e an

d c

on

trib

uti

ng

to

th

e d

evel

op

men

t o

f th

e A

ust

ralia

n d

airy

ind

ust

ry.

0009

Page 10: IN THE AUSTRALIAN COMPETITION TRIBUNAL...The Bonlac Supply Company (BSC) is owned by 1,300 Victorian and Tasmanian when interacting with Fonterra. dairy farmer shareholders in Australia

Fonterra Australia New Zealand

327 Ferntree Gully Road Mount Waverley VIC 3149 Australia

Supplier Administration Centre Ph 1800 266 674 www.fonterra.com

For more information contact:

Disclaimer: Nestlé Diet and Ski logos are used under licence by Fonterra Brands (Australia) Pty Ltd ®Registered Trade Mark of Société des Produits Nestlé S.A., Vevey, Switzerland

ORIGINAL

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