After the publication of yesterday’s post, Murray Goulburn’s Robert Poole has this afternoon responded to Milk Maid Marian’s questions following the Financial Review’s commentary on Devondale’s sales performance. They are included here in full.
Q1: Are the figures quoted in the Financial Review a fair representation of Devondale’s sales performance?
A: MG considers that the data represented in the Rear Window opinion piece in the Australian Financial Review is selective and as a result has the potential to be misleading to readers. MG does not consider that it is a fair representation of Devondale.
Q2: To quote from the Fin Review: “According to Murray Goulburn, a big upside of the Coles deal was that it would ‘drive significant growth in sales for [its] core Devondale milk and cheese brands in the years ahead’”
A: MG has consistently stated that the underlying basis for the Coles contract was to enter the private label daily pasteurised milk market. This statement was made on 10 April 2013 when MG announced its entry into the landmark 10 year contract and again on 3 July 2014 when announcing the commencement of supply to Coles under that agreement. MG launching the Devondale branded daily pasteurised milk and Devondale Cheese into Coles (after a nine year absence) was separate to the underlying business case of supplying private label daily pasteurised milk to Coles. The supply of Devondale daily pasteurised milk and supply of Cheese was not the basis for entering into the Coles contract.
Q3 How do actual Devondale sales figures compare to the budgets set when the plants were planned?
A: Sales are in line with business plans.
Q4: Does Murray Goulburn continue to enjoy “preferred supplier status” with Woolworths?
MG does not comment on its relationship with customers.
Q5: How have the Devondale sales at Woolworths compare with those at Coles?
A: This information is commercially confidential. MG is proud to be a supplier to total Grocery and Foodservice trade, and works with all customers to grow the business and maximise returns to farmers
Q6: Does MG plan to review its product mix or marketing strategy in light of Devondale’s sales performance?
A: MG has a balanced portfolio across international and domestic markets, ingredients, Private label and branded products. Like any strong business, MG is managing this portfolio to maximise the returns to Farmers, as evidenced by the current farmgate price.
Q7: How does Devondale’s sales performance compare with other areas of MG’s business?
A: In 2014/15 Devondale is one of the leading growth and profit divisions for MG