Murray Goulbum flags $82m hit from support package and price shake-up The Devondale dairy businesses centre in Laverton
DANIEL PALMER THE AUSTRALIAN 1:39PM October 27, 2016 Murray Goulburn has announced a dramatic reversal in its expectations for recouping funds from its $183 million Milk Supply Support Package (MSSP), while also flagging a sudden step-up in farm gate prices in a bid to curb leaking supply.
The activities will hit its bottom-line to the tune of $81.8m. In an update to the market this morning, the besieged dairy group (MGC) said the completion of a review into the MSSP had seen tens of millions of dollars' worth of adjustments, as terms were eased on its suppliers.
The controversial program was put in place in April to serve as an advance to farmers hurt by Murray Goulbum's shock price cut late in the FY2016 season.
Today's revisions include the extension of the recovery period from three years to six, a reduced annual recovery amount from farmers, a capped yearly recovery figure and step-up payments to farmers worth 25c a litre. It also incorporates the previously announced suspension of recoveries from October 1.
The shift comes after a forensic accounting expert claimed the dairy group may have overstated profits by $150 million due to the manner in which it included the $183m Milk Supply Support Package in its accounts, as first revealed in The Australian.