DAIRY PURCHASE

Waikato Times, Volume 121, Issue 20189, 8 May 1937, Page 10

DAIRY PURCHASE

WAIKATO VALLEY FIRM SOLD TO CO-OPERATIVE. LENGTHY NEGOTIATIONS ENDED. EXECUTIVE COMMISSION'S WORK. The Executive Commission of Agriculture announced to-day that a sale of the assets (including land, buildings, plant, machinery and stocks) and business of the Waikato Valley Dairy Company, Limited, to the co-operative interests In the Waikato and surrounding districts had been effected. The price agreed upon Is subject to certain adjustments, and is approximately £44,000.

The Commission for some months past has been assisting in negotiations between the Waikato Valley Company and a group of co-operative dairy companies, the understanding being that, in the event of a purchase being effected, all the other co-operative companies in the area would be entitled to participate on equal terms with the original purchasing companies. It was regarded as essential to the satisfactory conduct of the negotiations that the committee handling the matter in the preliminary stages should not be large, and to this end the Commission arranged that the

committee would comprise representatives of the New Zealand Co-opera-tive Company, Lijnited, the Te Awamutu Dairy Company, Limited, the Morrinsville Co-operative Dairy Company, Limited, and Te Aroha-Thames Valley Co-operative Dairy Company, Limited, and that the committee should act in a trustee capacity for all companies that might be interested. Earlier Negotiations. After a number of meetings had been held, the purchase price and, with one exception, the conditions of sale were agreed upon. The negotiations broke down at this point, but at the instance of the Commission were resumed yesterday, when a complete settlement was reached. Owing to the fact that the earlier breakdown of negotiations had brought about the disbandment of the committee, the members were unable without reference to their respective directorates to complete an agreement for purchase in the names of all four companies. It was decided. however, that until formal confirmation had been given by the boards of the Te Awamutu, Morrinsville and Te Aroha-Thames Valley Companies, the New Zealand Co-operative Dairy Company, Limited, should act as sole trustee and execute an agreement with the Waikato Valley Dairy Company, Limited, binding the purchase. The concurrence of the Hon. the Minister of Agriculture (Mr W. Lee Martin) was obtained, and the agreement was executed yesterday morning.

It is understood that the boards of the other three companies will meet within the next few days for the purpose of formally reconstituting the committee, which will be then responsible for the carrying out of the disposal of the assets of the Waikato Valley Dairy 'Company and the necessary adjustments among the purchasing companies and the companies that may (subsequently elect to Join in the purchase. Companies to Confer. This purchase opens the way to a rationalisation of cream-collection services and butter-manufacturing actiitles in the Waikato and surrounding districts. A meeting of all companies Interested will be called by the Commission within ihe next few weeks, when the details of a plan will be discussed. and suggestions Invited from the different, companies. The underlying desire Is to effect a rationalisation of services with the least, possible disturbance to suppliers, and on a basis that will permit the suppliers to exercise a reasonable choice of factories, while reducing the uneconomic overlapping ihat, now exists. This is in accordance with the. expressed wishes of the dairying industry throughout the Dominion. It is desired. if possible, that, agreement should be reached regarding a definite principle of rationalisation, which may, however, he modified in particular caiseg to meet special circumstances.

Some months ago ihe business interests and depots of the Waikato Valley Dairy Company in the Tauranga and Taumarunui districts were disposed of to the co-operative dairy companies operating in those areas. It is understood that, in respect of the company’s depot and business interests in the Rotorua and Bay of Plenty districts, a special basis of transfer has been agreed upon with the Bay of Plenty Co-operative Dairy Association Limited, and the New Zealand Cooperative Dairy Company. Limited. The agreement for sale and purchase will bo operative on June 2. It is understood Ihat the output of

the Waikato Valley Dairy Company for the current season will be approxinately 5000 ton-s of butter. It Is retorted that all parties to the agreement understood that the suppliers of •lie Waikato Valley Company should have the right lo select the factory in Iheir district which they intend to supply and that final adjustment would be made when all the supply has been accounted for.