EXCLUSIVE: Omidyar's firm purchasing last Hawaii-owned large dairy

EXCLUSIVE: Omidyar's firm purchasing last Hawaii-owned large dairy
Published: Dec. 30, 2014 at 10:40 PM HST|Updated: Dec. 30, 2014 at 11:05 PM HST
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BIG ISLAND (HawaiiNewsNow) - The only Hawaii-owned and operated large-scale diary left in the state is in the process of being sold to Ulupono Initiative, Hawaii News Now has learned.

"You're looking at the last dairy standing. And I think what we're seeing is the final destruction of the dairy industry in Hawaii, as it was," said Ed Boteilho, whose family has owned and operated Cloverleaf Dairy in the Big Island's Kohala district since 1962.

He spoke against the Board of Agriculture's emergency move this week to allow Meadow Gold to buy milk at lower prices than authorized by state regulators from his only competitor, Big Island Dairy, owned by an Idaho-based dairy that purchased the operation two years ago.

"They're actually choosing between my so-called old operation and this new upstart that's going to revolutionize the industry. And I'm the sacrificial lamb," Boteilho said.

Boteilho said he's in the process of selling his nearly 900-acre dairy to Ulupono Initiative, the investment company financed by eBay founder, billionaire Pierre Omidyar.

"Because my mom Josephine is 88 years old and she's the primary shareholder and she wants it all settled for her children and so that's what we're trying to do right now," Boteilho said.

Boteilho said Ulupono has signed an agreement of sale and is going through 90 days of due diligence for his dairy.

Ulupono's General Partner Kyle Datta confirmed the firm is interested in the dairy that Boteilho put on the market in November.

"We believe that it's very important to have the local milk industry remain viable and to support all the producers in the industry," Datta said.

Ulupono already plans to build a new dairy on Kaua'i at Maha'ulepu, near Koloa.

"Ulupono's goal is to increase supply of fresh, local affordable milk for all our island families," Datta said.

Ulupono has already received building permits but is conducting a voluntary environmental impact statement for the 578-acre Kaua'i project.

Forty years ago, there were 60 diaries spread throughout Hawaii, but now there are just two large-scale diaries on the Big Island. And there are no large dairies on Oahu or Maui.

Meanwhile, Big Island Diary won approval from state officials Tuesday to charge Meadow Gold less money for milk than what regulators previously allowed.

The diary won approval for a waiver from the Board of Agriculture to allow the dairy to sell its milk to Meadow Gold for lower prices after Meadow Gold threatened to stop buying milk from Hawaii dairies if they don't lower their prices.

"We are profitable moving forward if we do sell at those market prices. It's the way we've done business not only here but also on the mainland," said Brad Duff, general manager of Big Island Dairy, in testimony before the Ag board Tuesday morning.

Duff said his dairy plans to double milk production in the next year and a half, increasing its herd of cattle to 1,800.

"That's we came to the Big Island, because we knew we could be profitable here and in turn, be able to help those goals that Hawaii has of sustainability or producing local, fresh milk," Duff said.

Scott Enright, the chairman of the Board of Agriculture, said he doesn't think Hawaii consumers will see a change in milk prices as a result of the board's move to waive minimum milk prices for dairies.

"I don't discern any real difference for the consumer. There are so many different distributors putting milk into the marketplace. Meadow Gold is just one," Enright said, noting there are more than a dozen distributors of milk in Hawaii.

"And now we have Coca Cola entering the marketplace and they plan on distributing milk also, so it's an extremely competitive marketplace and Meadow Gold needs to stay competitive with that marketplace," Enright said.

The price of a gallon of milk in California is expected to decrease by about 40 cents in January and drop another 20 cents a gallon in February, Enright said.

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