CBH consults lawyers on Tutt's AGC move

10 Feb, 2016 01:00 AM
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Former CBH chairmen Rob Sewell (left), Tony Critch and Allan Watson. Mr Critch has questioned the current CBH Board's direction.
They've just got no idea of how to deal with potential competitors
Former CBH chairmen Rob Sewell (left), Tony Critch and Allan Watson. Mr Critch has questioned the current CBH Board's direction.

THREATS of legal action and a war of words have erupted in the grains sector following reports that a group of growers is considering a bid to corporatise grains co-operative CBH.

Former CBH stalwart of 42 years Colin Tutt has received communication from lawyers acting for CBH blocking him from working with the newly formed Australian Grains Champion (AGC) entity.

Since AGC's plans were revealed and confirmed in January, criticism has arisen of CBH's apparent lack of action in consolidating costs through its extensive supply chain to meet growing competition.

The criticism has come in large part from past CBH chairmen including Tony Critch and Neil Wandel.

These sentiments were shared by AGC's founders, including Tammin grower Brad Jones and former CBH director and Mingenew grower Clancy Michael despite the group's decision to remain quiet in the debate so far.

When contacted by Farm Weekly, Mr Tutt said he preferred not to comment as he and CBH were negotiating and he hoped to reach a positive outcome for both parties.

Mr Tutt, who left CBH in December, formed a supply chain consultancy company with fellow former CBH employee Max Johnson.

CBH confirmed it had an amicable meeting with Mr Tutt and it was working towards a resolution satisfactory to both parties.

It has been reported the legal moves sought to prevent Mr Tutt working with AGC in analysing the CBH network as a part of the group's proposal for the future of the co-operative.

Mr Tutt would bring with him many years of insight into the CBH network and it is this knowledge CBH would be wary of being revealed to any outside party.

CBH is in the throes of working on its supply chain optimisation project as it moves to save $25 million over the next two years.

In October 60 jobs were made redundant and it announced its Better Farm IQ program would not continue.

At the time, CBH chief executive officer Andy Crane said reducing the CBH head count was only one of the ways the co-operative would make savings.

He said savings could also be made through procurement, fleet, strategic bin closures and upgrades for its 195 sites.

Prior to harvest, CBH held grower meetings where it shared plans for the network and took feedback from growers.

But no details of the supply chain project have been revealed so far, with CBH confirming it would begin rolling out changes this year.

Former chairman Mr Wandel has remained tight-lipped since stepping down in August 2014 to be replaced by current chairman Wally Newman.

But in recent months he has criticised the CBH board saying it lacks strategic vision and must reconsider its co-operative structure and direction which is failing to address mounting competitive pressures.

Mr Wandel expressed concerns about CBH diversifying into fuel, fertiliser and finance products for growers saying he was unsure if enough profit margin existed in those activities.

"There's a lot of disillusion out there among the bigger growers," he said.

"The trouble is the 250 growers who probably grow a quarter of the grain and deliver to CBH really don't have much say anymore.

"We've dropped so many numbers and from what I can gather, it's some of these bigger growers who are really looking for change."

Mr Wandel said he was asked to get involved in the AGC's campaign for structural change about six to nine months ago, but declined the offer as he thought it would be inappropriate to accept it as an immediate past chair.

Mr Newman has said his predecessor was entitled to his personal views but was not well-versed on the now smooth-running board.

He also said if Mr Wandel believed the co-operative lacked strategy and vision, the situation was no different to when Mr Wandel was on the board where directors and management employed external specialists to help them develop strategy.

But Mr Wandel's criticisms do not stand alone, with fellow former chairman Tony Critch also asserting the CBH board is acting without direction and is in danger of losing its strength in WA.

"They've just got no idea of how to deal with potential competitors," he said.

"They're making no moves whatsoever to deal with competition and if and when it comes they're going to be totally exposed."

Mr Critch said there was a clear difference between Mr Tutt's movements with AGC and CBH, referring to a readiness to act in response to threats of competition growth.

He said he was not willing to comment on legal negotiations between Mr Tutt and CBH, but said he hoped "commonsense would prevail".

"Mr Tutt is a long time serving member of the company and he's a valued member and he has a fantastic reputation and a strong following," Mr Critch said.

"It's in the best interests of the organisation to come to an agreement without the whole thing getting out of hand."

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READER COMMENTS

I smell a rat
10/02/2016 11:44:32 AM, on Farm Weekly

It's appalling to read that the current Directors and Management at CBH who are supposed to be operating in the best interests of the growers of WA are attempting to stop Colin Tutt from sharing information that could potentially benefit the growers of WA. Sounds like they're too interested in protecting their own patch. I smell a rat and it's coming from West Perth.
Interested Party
12/02/2016 8:14:39 AM, on Farm Weekly

Yet another interesting development in the west I see and who will foot the bill for the threatened legal action? - the very farmers who have suggested a fighting fund for Mr Tutt. If I were Mr Tutt I would be hitting the AGC to foot any legal bill he may have. You do not have to be blind Freddy to work out this group would have leaked the partnership with Mr Tutt to try and give themselves more credibility. Very poor form again from what appears to be a disorganized group talking big. If this is how they intend to operate I would suggest Mr Tutt runs as far away from them as he can!
Deregul8
13/02/2016 12:39:08 PM, on Farm Weekly

IP you really should stick to spraying fleabane and leave the thinking to the professionals. AGC has a proposal and as shareholders we deserve a right to know all there is to know about our co-op so we can assess AGC's proposal in light of pure unadulterated co-op performance. At the moment, the current CBH annual report model is difficult to follow for the average shareholder and has transparency issues due to the ability to cross subsidize throughout the business model.
LTF
13/02/2016 1:26:30 PM, on Farm Weekly

Looks like Colin Tutt wants war with CBH and he has unwisely chosen selfish partners. He is now tarnishing his once good reputation. It was CBH which gave him the good reputation and not the other way around.

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COMMENTS

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Thanks Kevin - all fixed!
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Farm weekly is this the correct heading for this story? seems a bit odd. lol
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Lynda your accusations are baseless. I run 2000 breading ewes and my family makes our income