Grain group merger talks under way

29 Jan, 2016 01:00 AM
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MOVES to consolidate two peak grains industry service groups into an emerging national body are under way.

Fairfax Agricultural Media understands the Australian Export Grains Innovation Centre (AEGIC) is holding talks with Wheat Quality Australia (WQA) and Grains and Legumes Nutrition Council (GLNC) on a potential merger.

It comes after the AEGIC took over the Sydney-based technical and analytical services – formerly the Bread Research Institute (BRI) – from GrainGrowers late last year.

GrainGrowers acquired BRI in 2009 but handed its technical, market expertise and Sydney-based facility and 16 staff members over to AEGIC, in a move aimed at increasing commercial results for growers in growing export markets like Asia.

Initially based in Perth, the AEGIC was established in 2012 by the Grains Research and Development Corporation (GRDC) and WA State Government with each contributing $20 million over five years.

It aims to support Australian grain sales globally through a focus on improved quality, leading technologies and market research innovation.

GLNC Managing Director Georgie Aley declined to comment on the potential merger with AEGIC but did not deny talks were taking place.

WQA and GRDC were also contacted for comment but did not respond by deadline.

However, it’s understood a potential deal could be finalised by the end of June this year to improve costs and efficiencies and remove potential duplications, especially around classification of wheat varieties.

AEGIC Chair Terry Enright said any structural changes to the AEGIC or WQA would ultimately be a matter for their member organisations.

Mr Enright said part of AEGIC’s mandate was to support the trade and use of Australian grains around the world by providing international customers with information on quality, functionality and end-uses.

He said part of WQA’s mandate was to maintain Australian wheat’s international reputation through its wheat classification system.

WQA also assesses new wheat varieties in relation to their processing and end product suitability for key markets, he said.

“AEGIC currently has a very productive and positive working relationship with Wheat Quality Australia based on these common goals and we expect that to continue,” he said.

“It would be expected that any hypothetical structural change to the AEGIC or WQA would result in enhanced outcomes and a more streamlined approach to achieving these common goals for the benefit of Australian growers and the industry.

“The recent incorporation of the GrainGrower laboratories in Sydney into AEGIC is one example of this approach.”

Mr Enright said AEGIC would – in collaboration with its members and industry stakeholders – would continue to examine if structural change of relevant industry bodies “might enhance industry benefits”.

“It is important that the functions of the various bodies are assessed as to their benefit to the grains industry and the appropriate structures are in place to deliver on the agreed functions, so structural arrangements may change over time,” he said.

AEGIC is currently seeking a new CEO after David Feinberg resigned late last year citing a difference of opinion on strategy, on the role he took on in September 2014, taking over from inaugural boss Richard Price.

Grain Producers Australia Chairman and Victorian grain farmer Andrew Weidemann said regardless of structure, the AEGIC needed to maintain “credible independence” from the grain trade in providing a “strategic voice” that benefitted growers.

“Traders are not necessarily independent because there’s a competitive advantage on the use of information, likes stocks information, and growers can’t be fooled on that,” he said.

“Not all sectors of the trade find AEGIC to be problematic – some members want to see it grow and flourish – but it needs to be independent, in the interests of growers.”

Mr Weidemann said he saw “big opportunity” for AGEIC to take on a holistic pre-competitive and independent industry function in the deregulated grains export market, to deliver effective outcomes.

“We’re all worried about structures but we need to get on with the job and do something, in line with what growers need for a profitable industry and increased viability,” he said.

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FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

Jock Munro
29/01/2016 6:15:14 AM

Talk of mergers of these entities will make very little difference to the well being of Australia's wheat industry because it is basically in the hands of foreign mega merchants who have no obligations to anyone but their own shareholders.

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