The news about talks between First Milk and Milk Link breaking down is close to tragic. So disappears one of the few opportunities to make UK farmer owned dairy businesses an effective competitor, returning decent profits to shareholders.
Gwyn Jones from the NFU has asked for straight answers to be given to farmers as to why talks failed. The place NOT to start questions is over the nitty gritty of business valuations, or structure, or who is to blame for what. Farmers should instead be probing the competence of their boards to develop and implement a plan which gives farmer shareholders a better future. If they don't like the answers then farmers can withdraw their support and move on.
Farmers might want to start the ball rolling by asking how much money would be saved by streamlining the two coops into one business, how much sales would grow by reinvesting the cost savings, and how much extra profit would come back to farmers. The answers might make a squabble over valuation seem like something worth sorting out.
2 comments:
What's at the heart of the discussion? Would the two be stronger together than apart? If farmer-owned business don't band together, are they forced to compete (unsucessfully) with much larger corporate interests?
TW,
You've hit the nail on the head. These are two relatively small UK businesses who are struggling to compete in an increasingly global industry. No one, including the two coops themselves, is disagreeing about the strategy of merging to make a stronger company.All of which makes it so disappointing that they have got stuck on valuation.Colette.
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