Some growers from Australia's second largest sugar milling company are seething over a decision to sever its ties with the industry's marketing body Queensland Sugar Limited.
Grower-owned co-operative Mackay Sugar announced late Friday afternoon that it would terminate its current Raw Sugar Supply Agreement with QSL from the end of the 2019 season.
That means it will cease to supply raw sugar to the marketer beyond June 30, 2020.
In recent years, a working group had been established to reach a beneficial outcome on marketing agreements for all involved, but stakeholders involved say Mackay Sugar has now "jumped the gun".
Mackay Canegrowers Area Committee Chairman and grower Paul Schembri said he was extremely disappointed to hear of the decision via a media release while he was overseas.
"We are very angry about this announcement. Mackay Sugar did not consult with Canegrowers nor did they consult with any of the Mackay Sugar growers," he said.
Mr Schembri said Canegrowers would now seek legal advice regarding the surprise move.
"We will have to assess what our options are and I have to say that everything is on the table," he said.
"The legislation does dictate that two thirds of the sugar produced by Mackay Sugar is technically under the jurisdiction of the growers and they can determine where that goes."
Mackay Sugar stands by decision
Mackay Sugar has three mills throughout the Mackay region and about 800 growers.
Mackay Sugar CEO Jason Lowry refuted Mr Schembri's calls that the decision was made unjustly.
He said the company had been consulting with growers and the working group for some time.
"We have been consulting with them for the last two years on this and those consultations are still ongoing and will help to shape the on-supply agreement," Mr Lowry said.
He added the change to an on-supply agreement with QSL was not a new concept, and growers had no reason to be concerned.
He reiterated Mackay Sugar was only doing what grower choice in marketing legislation required of the miller.
"All we are doing is putting in place an agreement which allows for the grower choice which is required.
"We do not believe this is a major effort moving forward," said Mr Lowry.
There is some speculation that the dropping of QSL may have partly been a result of other pressures, such as poor milling performance and large debt.
The miller recently announced it would be considering a joint venture to ensure the company's future.
Mr Lowry, however, said this decision has nothing to do with joint ventures or other pressures.
via ABC Rural http://www.abc.net.au
December 5, 2017 at 09:53AM
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