Breakfast has become a decidedly un-Australian affair because of the foreign takeover of our food companies.
Once upon a time Vegemite on toast , a Berri orange juice and Weet-bix constituted a hearty Aussie breakfast. Not now, although at least the milk comes from a locally owned company.
Well, that's about to change too.
After a protracted hunt for a buyer, the Illawarra-born Dairy Farmers is set to be bought by Japanese company National Foods for $910 million.
The proposal has been unanimously endorsed by the board of Australian Co-operative Foods Limited, which trades as Dairy Farmers, and will be put to shareholders in November.
For the proposal to succeed, more than 75 per cent of the shareholders need to endorse it.
It sounds like a big, scary foreign takeover, except at the front of the push are Australian farmers. Jamberoo dairy farmer Mark Honey said there were strong emotions about the impending sale.
"But we are in a global economy now," he said.
"It's the step the industry had to take and unfortunately no Australian company was interested."
If the sale proceeds, the co-operative's 2000 or more farmer shareholders will receive $5.65 per share, more than $4 above their present nominal worth.
About 30 farmers work for Dairy Farmers in the Illawarra, which is where the company was born.
On January 15, 1900 the Dairy Farmers Co-operative Milk Company Ltd was formed by 65 stakeholders, mainly Illawarra dairy farmers.
Our region had other milk co-ops based in geographical areas - including Australia's first in Kiama - but by 1989 they had joined as one and traded as Dairy Farmers.
Dairy Farmers expanded and the raw materials in its products are now produced in all eastern states and South Australia.
In 2004 the co-op was divided into the milk supply division - Dairy Farmers Milk Co-operative - and the processing division, which is the subject of the present aquisition.
In that same year Dairy Farmers began a restructuring and rationalisation process which led to the loss of jobs in Wollongong and Bomaderry.
It created eight brands under which to trade, including COON, dare, OAK, moove, Shape and SKI.
The National Foods offer will include a fully franked special dividend for shareholders payable by Australian Co-operative Foods of up to 59[PI9014]Centsymb per share.
Australian Co-operative Foods chairman Ian Langdon said the Japanese buy-out provided both shareholders and farmers with benefits.
"The National Foods proposal offers Australian Co-operative Foods shareholders an attractive cash price as well as providing certainty regarding forward farm-gate milk pricing and security of milk supply arrangements," Mr Langdon said.
Under the deal, farmers who sign revised contracts will receive farm-gate milk prices 1-2[PI9014]Centsymb a litre higher than they presently receive plus a supply contract until at least 2010.
Dairy Farmers Milk Co-operative will continue to supply milk as a co-operative.
Its chairman Ian Zandstra, a Shoalhaven farmer, said the deal would provide farmers with more certainty in relation to farm-gate pricing and off-take.
"The benefits of the model will allow individual farmers to focus on investing and building their own businesses," he said.
Mr Honey said the proposal would "definitely" be approved because of the money offered.
"Our costs have skyrocketed in the last five years," he said. "We use quite a lot of diesel fuel, the price of grain for the cattle has doubled in four years and wages, electricity and water is all up."
Countries such as India and China also hoard fertilisers to guarantee food stocks, meaning the cost of fertiliser to local farmers has doubled in 18 months.
With the average age of a dairy farmer about 58, Mr Honey anticipated many would take the opportunity to "get out of the industry with a bit of dignity", although he doubted there would be "a mass exodus".
And a world food shortage means after contracts expire in 2010, farm gate prices should be attractive enough to ensure farmers stay in the game.
"There will be a lot of soul searching from people in this region when it comes down to making the decision," Mr Honey said.
"But what products are Australian anymore? It's a global economy now.
"I think the offer is higher than expected."
This week, the Australian Bureau of Agricultural and Resource Economics found the rising price of milk had helped improve the incomes of dairy farmers during the past year despite the drought.
Higher milk prices had tripled the average annual income of each farmer to more than $110,000.
The average farm business profit also increased to almost $24,000, up from a loss of $39,400 the previous financial year.
But there are concerns the takeover by National Foods, which also owns Pura and Yoplait, will bring with it the troubles of a less competitive market.
This could mean fewer options for farmers looking to sell their product and higher prices at the supermarket.
If Dairy Farmers' shareholders approve the transaction it will create the biggest dairy business in Australia, with combined annual sales of more than $3.5 billion.
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