The new CEO of Murray Goulburn, Ari Mervis, has done something small but truly fabulous: he’s apologised for stuffing up.
On Tuesday, Mr Mervis told listeners to ABC Radio’s Country Hour program that MG’s opening price of $4.70 was “…well above the cost of production” in an interview with Warwick Long. I wasn’t sure if he was out of touch or trying to spin a pig’s ear into a silk purse. Either way, it wasn’t a good look for the head of Australia’s largest milk processor.
In this apology totally devoid of spin, Mr Mervis cuts to the chase and recognises the difficulty facing its farmer suppliers.
While MG’s opening will not make it a price leader, Mr Mervis’ letter to suppliers signals that, after a couple of years in the wilderness, the co-op is back on the path of becoming a values leader in Australian dairy.
The Milk Maid Marian 
I’m a consumer. It was on my list today to find out what brands they supply and stop buying them, as that price is very low.
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Hi Chook,
I really appreciate you thinking about the right thing to do and putting your money where your mouth is. That’s so encouraging.
Don’t boycott MG, though, I think they need all the help they can get.
My advice to anyone who would like to help is just look for Australian-made branded dairy products that are reasonably priced. That really makes a difference.
Thanks again so much.
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Whilst an admirable quality it shows a very concerning situation where as CEO of Murray Goulburn that had just announced its opening price for the coming season that he has not got aan adequate understanding of the true cost of production. His apology is compounded by trying to use lower input costs to defend his position. Input feed costs are lower largely due to inability of dairy producers to purchase due to unsustainable farm gate prices.
A fail on many levels other than his willingness to respond to the backlash that he received.
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I understand what you’re saying, Nigel. Still, very pleased to see someone at the helm of MG that admits mistakes and goes about trying to correct them.
MG got itself into this position because of hubris. A dash of humility will help it recover.
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Ari has believed what he said, input prices are down and $ 4.70 is a reasonable income that will see suppliers make a profit.
The same people who oversaw the build up of stock at MG due to low prices and high production costs, the same executives who came up with the clawback, the same executives who backed in the new retail product strategy that was ditched yesterday have been the same people educating Ari in the Dairy Industry. MG suppliers are queing to get out after the announcement of opening prices by MG and Bega – the coop will not retain 2.5 billion litres and according to Ari this is critical to the processor surviving. The industry has seen all of this before but I never though it would happen to MG.
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exactly
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If those executives were to blame for Ari’s embarrassment, they will have some explaining to do!
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Nope, I will buy from the people who pay farmers a fair price. And since I’m Mrs average, I bet most people will too. I would have thought MG had a bad enough reputation with the public without paying below the cost of production, that ain’t fair!
Just do the right thing, MG, show some integrity!
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Well, Chook, the thing is that MG is owned largely by the farmers who supply it, so if you boycott its products, you hurt those already hurting farmers even more. Sadly, MG is just not financial enough to pay the going price at the moment.
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