BONLAC Foods Limited has announced a strong opening price for milk produced by its supplier shareholders in Victoria and Tasmania. The opening price is 16 per cent up on last season's opening figure, which included regulated federal and state payments. For milk supplied from August to December this year, the opening committed price for an average supplier is $1.99/kg butterfat and $4.78/kg protein. The increase reflects the improved productivity achieved by Bonlac's company-wide efficiency drive and improving international commodity prices. "We are already seeing the impact of improved efficiency and know there are further grains to be made as we continue to strive for greater productivity," said Bonlac chairman Bill Hill. He said the Bonlac board had agreed to issue a new C-class share as a mechanism to identify and ultimately reward the loyalty of existing supplier shareholders. "There are a number initiatives being considered to continue the momentum created by our strong opening price," Mr Hill said. The chairman said directors were particularly pleased to be able to set an opening price considerably higher than last year's pre-deregulation price. "This means that farmers will receive more for their milk this year, even though Commonwealth Direct Market Support and state market milk payments have ceased. We have more than bridged the gap created when the support payments stopped," he said. Mr Hill said the closure of four ageing manufacturing plants to concentrate production at more efficient factories and a reduction in administration costs in the regions and at the Melbourne head office had underpinned the improved opening price. "We took some hard decisions and now they are beginning to bear fruit," he said.