WA farm groups will start pressuring Coles to stock only local beef in WA once the Wesfarmers acquisition is finalised.
Over the past few years, Coles had caused a furore in WA by stocking only eastern states beef in their WA supermarkets.
Pastoralists and Graziers Association meat section president Tim D¹Arcy said the PGA would commence lobbying Wesfarmers to push more WA product into Coles supermarkets.
³The main issue is meat, in the past the majority of the beef has come in from the eastern states and we would like to see that situation change,² Mr D¹Arcy said.
Mr D¹Arcy said price should not be an issue when WA meat was the cheapest it had been for some time.
³Meat has never been cheaper than it is in WA at the present time and producers are regularly receiving 50c/kg less than prices in the east,² he said.
WAFarmers chief executive officer Doug Parker said WAFarmers would be pushing to have more WA produce on Coles shelves.
³In the past most of Coles meat has been sourced from over east and we hope that may now change with the announcement,² Mr Parker said.
³There is still a long way to go on this, but I think it would be beneficial for Coles in the long run to promote and sell WA product.²
Mr Parker said Wesfarmers¹ history would hopefully make a difference when the decision came of where to buy the produce for WA stores.
³The fact that Wesfarmers started as a rural company and is WA-based will hopefully play a part in the decision making process also,² he said.
Wesfarmers reached agreement with the board of Coles Group to put recommended cash and share offer from Wesfarmers to Coles shareholders by way of a scheme of arrangement.
It will pay the equivalent of $17.25 a share for Coles in what will be the biggest corporate takeover in Australian history.
The deal includes a cash component of $4 per Coles share, Wesfarmers scrip equivalent to $13 and a $0.25 per share final dividend.
Coles chairman Rick Allert said the Coles board would recommend the deal to shareholders in the absence of a superior offer and subject to an independent expert deeming the proposal fair and reasonable
Based on current market values the merged group would rank in the top 10 companies in terms of market capitalisation value listed on the Australian Stock Exchange.
The offer of $17.25 a share represents a premium of 50pc on the Coles closing price on August 14, 2006, the day before speculation of the first private equity approach to Coles.
Wesfarmers managing director Richard Goyder said Wesfarmers looked forward to completing the sale process as quickly as possible.
³The recommendation from the Coles board is a big step towards helping end the uncertainty for shareholders, employees, suppliers and customers surrounding the company¹s ownership review,² Mr Goyder said.
³This is an important transaction not only for the shareholders of both companies but for Australia.
³It is an opportunity for current shareholders to retain an ongoing interest in this important Australian company, for Coles to remain an Australian-owned company and for employees and consumers to benefit from a revitalised major force in the national retail sector.
³With the resolution of the ownership issue now in prospect, employees will be better able to focus on their key task of improving business performance in a very competitive marketplace.²