Dairy Industry IndecisionFriday, May 18, 2001
The yet to be formed largest single company in New Zealand must be causing its waiting suppliers and
shareholders some dismay.
If the past few months are an example of the management incisiveness of the new organisation then the
dairy industry is in “deep schtung” (schtung: odious rotting milk)
What can be wrong? What can be the cause of the lack of information and the failure to meet deadlines?
It would seem that the problems are not external to the merger; otherwise the Government would have
quickly been identified as the problem. The Minister appears to have bent over backwards to smooth
the way for the merger and the only residual risks from government lie in the detail of the legislation
yet to be passed.
The holdup seems to point to problems within the parties to the agreement. While statements point to
disagreement over the individual to be appointed as CEO it is hardly creditable when that task in
the normal course of events is the first to be undertaken by the new board.
Have the parties to the merger agreement become remote from the wishes of the shareholders. It seems
that all the known issues of the financial equity of the merger had been satisfied and a consensus
amongst the negotiators reached that the merger should proceed because in their opinion the future
in a merged company was better than non-merged.
It is a sorry state to be in if the future of the dairy industry can be ransomed over the inability
of negotiators to agree on the person to manage the new organisation.