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National Foods takes offer direct to farmers

As a result of the interest expressed by a number of individuals and following a meeting today at which National Foods clarified its offer for the farmers’ Collective Bargaining Group, National Foods has decided to take its milk price offer direct to its Tasmanian dairy farmers.

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October 30, 2009

As a result of the interest expressed by a number of individuals and following a meeting today at which National Foods clarified its offer for the farmers’ Collective Bargaining Group, National Foods has decided to take its milk price offer direct to its Tasmanian dairy farmers.

Conor O’Malley, Group Executive Corporate Service and Logistics, said communication via the Collective Bargaining Group has failed and the only sensible course now is to talk directly to farmers.

“We will confirm for our farmers what the price offer looks like for them individually and also explain the changes we made to the wording of the contract in response to our farmers’ requests,” Mr O’Malley said.

“A number of our farmers, and others who are not currently National Foods suppliers, have said they are very interested in the offer we made public last week.”

Under the contract schedule, National Foods will provide a minimum base price of 33 cents per litre across the year plus around 3.8 cents per litre in contract, quality, volume, and compositional bonuses. This adds up to 36.8 cents per litre. Should there be future price increases by Fonterra in response to world price movements, National Foods will maintain its minimum price premium guarantee against the Fonterra price.

On top of the milk price offer, National Foods is offering a $1.1 million assistance package to help Tasmanian farmers through this particularly difficult period. Therefore, the total offer to farmers equates to a value of more than 37.5 cents per litre over the year.

“This process has not been easy but the time is right to sit down and have conversations with our farmers to ensure they receive, directly from us, a clear understanding of the pricing package we are offering,” Mr O’Malley said.

For more information:
Geoff Lynch
General Manager Corporate Affairs
03 9188 7616
0405 319 819
geoff.lynch@www.lionco.com