Frestine milk suppliers waiting in hope

THOSE dairy farmers supplying Frestine Dairy Australia who are yet to be paid in full for their February milk have an anxious wait, hoping the company honours its recent commitment to do so by April 9.

Sentinel-Times spoke to a South Gippsland dairy farmer who is still awaiting payment from Frestine and will no longer be supplying that business.

The farmer spoke of uncertainty and lack of communication, labelling Frestine’s treatment of farmers as “abysmal and a disgrace”.

The Weekly Times reported on Wednesday, April 1, that the Indonesian majority-owned company’s Chief Executive Arief Rahardja said that short-term financing was expected soon, allowing initial payments this week, with all farmers to be paid in full by Thursday, April 9.

“We are pleased to confirm that a multimillion-dollar capital investment from an existing Frestine investor has now been finalised, including the completion of asset sale arrangements and the signing of formal agreements,” Mr Rahardja was quoted as saying.

Frestine is also reported to have committed to make full payment for milk supplied in March by April 15.

The Weekly Times notes that an industry player close to the company said it was “releasing farmers”, explaining that under the mandatory dairy code, a farmer can end their contract if a processor fails to pay, as long as the farmer gives 14 days’ notice.

Sentinel-Times has been told that, because of the muddled communication farmers received from Frestine, many who wish to exit their milk supply contracts were delayed in providing notification due to the uncertainty created.

Some farmers are in the difficult position of lacking the confidence to continue supplying milk to Frestine, while crossing their fingers that the business gets back on track, with one declaring, “If the company goes under, we’re up s**t creek.”

The farmer elaborated that, as unsecured creditors, milk suppliers would be well down the list of those paid in the event a company becomes insolvent, with it unlikely they would see much, if anything, of what they are owed.

United Dairy Farmers of Victoria (UDV) President Bernie Free dropped in at Frestine Dairy Australia’s Melbourne headquarters on March 30, explaining on ABC radio that UDV had been urging Frestine to get in contact, but hadn’t heard anything so he took the direct approach.

He spoke of the stresses faced by Frestine suppliers at a time of extreme price rises for fuel and fertiliser against a backdrop of payment uncertainty.

When asked by Country Hour host Warwick Long what farmers can do if their milk company isn’t paying them as it said it would, Mr Free advised affected farmers to seek legal advice from a lawyer who understands their business and has the necessary expertise, explaining milk contracts vary from business to business.

Mr Long said the ABC has repeatedly requested a response from Frestine but at the time of the program, had yet to receive one.

Stock & Land reported that Mr Free had expressed disappointment in the lack of communication from Frestine and that there have been mixed messages about what the issues are.

That publication mentioned that at the time of writing, Trent Webb, a sharefarmer near Warragul, was waiting on $14,000 and said he won’t stay with Frestine, illustrating the extent of the strain being placed on those affected.