Murray Goulburn salaries, profits leave sour taste for dairy industry

Gary Helou, before his resignation as Murray Goulburn managing director. Pic: David Geraghty

Former Murray Goulburn boss Gary Helou was paid $2 million last year for his work up to his formal resignation on April 28.

This was down on the $2.9 million he picked up in the 2015 year, in large part because he received no short-term bonuses last year. He was paid $751,442 in short-term bonuses in the 2015 year.

Murray Goulburn chair Phil Tracy was paid $314,046 last year, up $28,213 on his prior year pay.

Current MG boss David Mallinson received $754,175 in pay last year.

The payouts are in stark contrast to those to farmers who have been forced off the land, or have had to cut back sharply, after the cut in farmgate milk prices last financial year.

The issue was fanned by continued statements by Murray Goulburn that it would be paying as much as $6 a kilo just weeks before slashing the figure from the then price of $5.60 to $4.80.

Farmers were then asked to pay back money and the Australian Competition and Consumer Commission is investigating whether this behaviour amounted to unconscionable conduct.

This is separate to the government inquiry ordered yesterday into the dairy industry.

This will look at, among other matters, the degree of competition for milk supply from processors.

The Murray Goulburn salaries were revealed this week with the company’s annual results, which showed an increase in profits from $21.2 million to $39.8 million.

The increased profits have created a storm in the industry at a time when, for just the second time since deregulation 16 years ago, the company cut its farmgate prices.

Agriculture Minister Barnaby Joyce continues to bang the drum on the $1 a litre milk sold in the supermarkets.

So called market milk accounts for 2.5 billion litres out of the 9.5 billion litres produced in Australia.

Some two thirds of the milk is produced in Victoria which has a lower cost at around 40 cent a lite, against 55 to 60 cents for Queensland.

Northern state output is centred on market milk sales, which explains the increased sensitivity to the supermarket prices.

But Joyce is banging the wrong drum on this score and underplays the contribution the sales make to underwrite processor income.

Murray Goulburn raised $500 million last year and the co-op guaranteed distributions but the listed company has taken a beating in the market, trading down 4.8 per cent today at $1.37 a share, down from $2.30 back in March.